The Financial

2010
Development Report
World Economic Forum World Economic Forum USA Inc.
Geneva, Switzerland New York, USA

The Financial Development

Report 2010
The terms country and nation as used in
this report do not in all cases refer to a
territorial entity that is a state as understood
by international law and practice. The terms
cover well-defined, geographically self-
contained economic areas that may not
be states but for which statistical data are
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Copyright © 2010
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ISBN-10: 92-95044-93-2
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Contents

Contributors v Part 2: Country/Economy Profiles 57

How to Read the Country/Economy Profiles ..............................59
Academic Advisors vii List of Countries/Economies ........................................................61
Country/Economy Profiles............................................................62

Preface ix
by Klaus Schwab

Foreword xi
Part 3: Data Tables 291
by Kevin Steinberg
How to Read the Data Tables ....................................................293
Index of Data Tables ...................................................................295
Executive Summary xiii Data Tables .................................................................................297

Technical Notes and Sources 369

Part 1: Findings from the Financial 1
Development Index 2010 About the Authors 379

1.1: The Financial Development Index 2010: 3 Partner Institutes 381

Unifying the Narratives of Reform
by James Bilodeau and Ibiye Harry

1.2: Financial Development, Capital Flows, 31

and Capital Controls
by Howard Davies and Michael Drexler

1.3: SME Finance: What Have We Learned 49

and What Do We Need to Learn?
by Thorsten Beck
 Contributors
Contributors

EDITOR EXPERT COMMITTEE*

James Bilodeau Chris Coles

Associate Director and Head of Emerging Markets Finance Partner, Actis
World Economic Forum USA
Howard Davies
Managing Director, The London School of Economics and
PROJECT TEAM Political Science
Ibiye Harry Michael Drexler
Project Manager, World Economic Forum USA Global Head of Strategy, Commercial Investment Banking and
Wealth Management, Barclays
Lawrence Chuang
Associate, World Economic Forum USA Nick O’Donohoe
Global Head of Research, JPMorgan Chase
PROJECT ADVISORS Gerard Lyons
Chief Economist and Group Head of Research,
Margareta Drzeniek Hanouz
Standard Chartered
Director, Senior Economist
World Economic Forum Raghuram Rajan
Professor of Finance, University of Chicago
Thierry Geiger
Associate Director, Economist Nouriel Roubini
World Economic Forum Professor of Economics and International Business,
New York University and Chairman, Roubini Global Economics v
CONTRIBUTORS Andrei Sharonov
Managing Director, Troika Dialog
Thorsten Beck
Professor of Economics and Chairman of the European Kevin Steinberg
Banking Center, Tilburg University Chief Operating Officer, World Economic Forum USA

Howard Davies Augusto de la Torre

Managing Director, The London School of Economics and Chief Economist for Latin America and the Caribbean,
Political Science The World Bank

Michael Drexler
Global Head of Strategy, Commercial Investment Banking and
We would like to thank Dealogic and Thomson Reuters for their
Wealth Management, Barclays
generous contribution of data for this Report.

FROM THE WORLD ECONOMIC FORUM

Centre for Global Competitiveness and Performance

Kevin Steinberg, Chief Operating Officer, World Economic Forum
Jennifer Blanke, Director, Lead Economist, Head of the Centre
USA†
for Global Competitiveness and Performance
Max von Bismarck, Director and Head of Investors Industry†
Irene Mia, Director, Senior Economist
Giancarlo Bruno, Director and Head of Financial Services
Ciara Browne, Associate Director
Industry†
Pearl Samandari, Community Manager
Anuradha Gurung, Associate Director†
Roberto Crotti, Junior Quantitative Economist
Trudy Di Pippo, Associate Director†
Abel Lee, Associate Director†
Kerry Wellman, Senior Community Manager†
We thank Hope Steele for her superb editing work and
Lisa Donegan, Community Manager†
Neil Weinberg for his excellent graphic design and layout.
Irwin Mendelssohn, Community Manager†
We would also like to thank Chris Ryan for his assistance in
Tom Watson, Project Manager†
assembling data for this Report.
Isabella Reuttner, Project Manager†
Nadia Guillot, Senior Coordinator
Alexandra Hawes, Coordinator†
Takae Ishizuka, Coordinator†
Elisabeth Bremer, Coordinator†

* The Forum is grateful for the support of the Industry Partners who served on the Expert Committee. Any findings contained in the Report are
solely the view of the Report’s authors and do not reflect the opinions of the Expert Committee members.
† Employees of the World Economic Forum USA.
 Academic Advisors
Academic Advisors

Martin Baily
Brookings Institution

Thorsten Beck
Tilburg University

Richard Cooper
Harvard University

Erik Feyen
The World Bank

Luc Laeven
International Monetary Fund

Subir Lall
International Monetary Fund

Maria Soledad Martinez Peria

The World Bank

Sergio Schmukler
The World Bank

Luigi Zingales
University of Chicago
vii

The Forum is grateful for the support of the Academic Advisors who contributed to the Report. Any findings contained in the Report are
solely the views of the Report’s authors and do not reflect the opinions of the Academic Advisors.

Preface
KLAUS SCHWAB
Executive Chairman, World Economic Forum
When the Forum’s first Financial Development Report
was published in 2008, the world was in the midst of
a financial crisis that posed one of the single greatest
threats to global prosperity we had seen in over 70
years. Two years later, with the publication of this third
edition of The Financial Development Report, the global
community can look back with an appreciation that
concerted global action may have averted the worst of
an immediate crisis. This work is far from complete,
however, and the immediate dangers of financial insta-
bility are still present. Perhaps the most immediate con-
cern is that many developed economies must confront
severe fiscal constraints without jeopardizing a fragile
economic recovery.
The financial risks confronting the global economy
are both broader in scope and longer in term than just
those stemming from the recent crisis. The robust
growth and relative stability of emerging market
economies have been bright spots shining through
the turmoil of recent years. It is expected that the
global economy will rely on these economies to be
the primary engine of global economic growth in the
years ahead. Yet these economies in turn must rely on
financial systems that, in many instances, are less devel-
oped. It is imperative that development areas within
these financial systems be addressed to ensure that
future economic growth is not undermined: new
sources of long-term capital must be tapped to fund
much-needed infrastructure; local capital markets must
be developed to meet the expanding credit needs of
all economic sectors; and access to retail financial ser-
vices must be extended to help stimulate consumer
demand in these markets, which in turn can offset
global imbalances.
The aftermath of the financial crisis has brought a
ferment of ideas about how to respond to the crisis and
establish new models for financial systems going for-
ward. The Forum itself has hosted much of this dialogue
through its various stakeholder communities, its regional
and annual events, and its Network of Global Agenda
Councils. While it is important that these ideas be heard
and vetted, it is also increasingly important that stake-
holders move to unite around a coordinated reform
agenda that addresses all of the financial risks that could
threaten long-term economic growth. It is in this spirit
that we offer this year’s Financial Development Report, as a
comprehensive yet accessible reference tool with which
Preface
to focus priorities on the most-needed areas of financial
reform.
In the tradition of the Forum’s multi-stakeholder
approach to global issues, the creation of this Report
involved an extended program of outreach and dialogue
with members of the academic community, public fig-
ures, representatives of nongovernmental organizations,
and business leaders from across the world. This work
included numerous interviews and collaborative sessions
to discuss the findings, and their implications, of the
Index as well as possible modifications to its design.
Other complementary publications from the World
Economic Forum include The Global Competitiveness
Report, The Global Enabling Trade Report, The Global
Gender Gap Report, The Global Information Technology
Report, and The Travel & Tourism Competitiveness Report.
We would like to express our gratitude to our ix
industry partners and the academic experts who served
on the project’s Expert Committee: Chris Coles,
Partner, Actis; Michael Drexler, Global Head of
Strategy, Commercial Investment Banking and Wealth
Management, Barclays; Nick O’Donohoe, Global
Head of Research, JPMorgan Chase; Howard Davies,
Managing Director, London School of Economics;
Gerard Lyons, Chief Economist and Group Head of
Research, Standard Chartered; Professor Raghuram
Rajan, University of Chicago; Andrei Sharonov,
Managing Director, Troika Dialog; Kevin Steinberg,
Chief Operating Officer, World Economic Forum USA;
and Augusto de la Torre, Chief Economist for Latin
America and the Caribbean, The World Bank. We are
appreciative of our other academic advisors who gener-
ously contributed their time and ideas in helping shape
this Report. We would also like to thank James Bilodeau
at the World Economic Forum USA, editor of the
Report, for his energy and commitment to the project, as
well as the other members of the project team, includ-
ing Ibiye Harry and Lawrence Chuang. We are grateful
to Margareta Drzeniek Hanouz and Thierry Geiger for
their guidance as Project Advisors. Appreciation also
goes to the Centre for Global Competitiveness and
Performance Team, including Jennifer Blanke, Ciara
Browne, Roberto Crotti, Irene Mia, and Pearl Samandari.
Finally, we would like to thank our network of Partner
Institutes, without whose enthusiasm and hard work the
annual administration of the Executive Opinion Survey
and this Report would not be possible.

Foreword
KEVIN STEINBERG
Chief Operating Officer, World Economic Forum USA
The World Economic Forum is pleased to release The
Financial Development Report 2010, the third edition
since its inaugural publication in 2008. Initiatives such as
this Report aim to enrich and focus the dialogue, among
multiple global stakeholders, that the Forum has pro-
moted through its events, Global Agenda Council
Network, and Industry Partnership Programme. The
Report represents a key ongoing initiative undertaken as
part of the Forum’s Industry Partnership Programme.
The Programme provides a platform for CEOs and
senior executives to collaborate with their peers and
an extended community of academics, leaders from
government, and experts from civil society to tackle
key issues of concern to the global community.
Unifying the narratives of reform
Financial reform continues to occupy a central place on
the global agenda. In some respects, because the urgency
of the response to the immediate financial crisis has
moderated, there is now more room for debate about
priorities for long-term reform and preferred models for
financial development in the years to come. We believe
this Financial Development Report provides an important
tool with which to ground this debate in actual meas-
ures of progress at the country level.
At the global level, while progress has been made in
many areas—such as the new capital requirements under
Basel III—many questions remain in areas such as coun-
tercyclical capital buffers and the best way to treat system-
ically important institutions. Even as multilateral rules
are drafted and agreed upon, it is vital that institutional
reform at the country level be undertaken to ensure that
new rules can be enforced and regulatory arbitrage pre-
vented. The variables in this Report help provide guid-
ance on measuring progress at the country level.
As reforms are proposed and some enacted, there is
a diversity of opinion around how they may affect the
availability and cost of capital and how this impact could
affect economic growth. The business environment in
different economies, including the tax regime, avail-
ability of talent, and cost of doing business, could also
impinge on the availability of capital. This Report includes
assessments of the business environment and availability
of different forms of capital for corporate end-users.
The G-20 and various multilateral organizations
have identified financial inclusion as a central issue on
their agenda. The ability of a financial system to provide
Foreword
basic financial services—such as loans, savings accounts,
and insurance to consumers—is one of its most impor-
tant functions. A number of measures with which to
assess progress in the provision of retail financial services
are provided within the Report.
The Financial Development Report 2010
In light of the ongoing richness of debate, we offer this
year’s Report as a way to unify these different narratives
and enable stakeholders to collectively prioritize, imple-
ment, and assess reforms. Part 1 of the Report summa-
rizes this year’s Index results and related findings in
three sections. Chapter 1.1 outlines the methodology for
the Index, the academic theory and assumptions sup-
porting it, and some of the key findings from the Index
results. Chapter 1.2 provides an example of how the
xi
Index can be used to help countries prioritize reform
efforts, focusing on the development of defenses against
volatile capital flows and a code of practice for use of
capital controls. Chapter 1.3 highlights the issue of
small- and medium-sized enterprise (SME) finance, an
example of a critical issue that must be included within
an expanded narrative of reform that addresses financial
development more broadly.
We encourage readers to delve into the detail of
Part 2: Country/Economy Profiles and Part 3: Data
Tables of the Report. The richness and breadth of the
data paint a balanced picture of the challenges and
opportunities faced by different countries.
By design, this Report must rely on data that are
available for all the economies it covers, to proxy for key
elements of financial development. This year, as every
year, it is with a degree of humility that we put forth
our findings given some of the inherent limitations of
these data, the rapidly changing environment, and the
unique circumstances of some the economies covered.
Yet, in the Report’s attempt to establish a comprehensive
framework and a means for benchmarking, we feel it
provides a useful common vantage point to unify prior-
ities and frame action. We welcome your feedback and
suggestions for how we may develop and utilize this
Report to promote the potential of financial systems as
enablers of growth and individual prosperity.
On behalf of the World Economic Forum, we
wish to particularly thank the members of the Expert
Committee, the Academic Advisors, and James Bilodeau
and Ibiye Harry for their boundless support.
 Executive Summary
Executive Summary

The Financial Development Report 2010 and the Financial Table 1: Top 10 in overall Index ranking
Development Index (FDI) on which it is based provide
a score and rank for 57 of the world’s leading financial 2010 2009 2010 Change
rank rank score in score
systems and capital markets. They analyze the drivers of Economy (1 to 57) (1 to 55) (1 to 7) (2010 vs. 2009)

financial system development that support economic United States 1 3 5.12 –0.01
growth in advanced and emerging economies to serve as United Kingdom 2 1 5.06 –0.22
Hong Kong SAR 3 5 5.04 +0.06
a tool for countries to benchmark themselves and prior-
Singapore 4 4 5.03 +0.01
itize areas for reform.
Australia 5 2 5.01 –0.12
The Report defines financial development as the factors, Canada 6 6 4.98 +0.02
policies, and institutions that lead to effective financial interme- Netherlands 7 8 4.73 –0.12
diation and markets, as well as deep and broad access to capital Switzerland 8 7 4.71 –0.21
and financial services. In accordance with this definition, Japan 9 9 4.67 +0.03
Belgium 10 13 4.65 +0.15
measures of financial development are captured across
seven pillars:

1. Institutional environment
2. Business environment
3. Financial stability
4. Banking financial services
5. Non-banking financial services
6. Financial markets
7. Financial access
The FDI thus takes a comprehensive view in assess-
ing the factors that contribute to the long-term devel-
opment of financial systems; it includes but is much
broader than just measures of immediate financial
stability.
Because of this broad definition, for the top scorers
in the Index, the United States (1st) and the United
Kingdom (2nd), the very low scores in financial stability
are counterbalanced by incumbent strengths in financial
intermediation that buoy their positions in the rankings.
The two countries both show advantages in non-
banking financial services and financial markets, and
the United Kingdom also demonstrates strength in
banking financial services (based on measures of size
and efficiency—financial stability is captured elsewhere).
The business environments in both countries display
signs of deterioration, particularly in the area of
taxation.
As in last year’s Index, the economies in the top 10
are predominantly smaller (by GDP) than the members
of the G-8; this is true for 6 out of the top 10 in overall
rank (see Table 1). These smaller economies include
Hong Kong SAR (3rd), Singapore (4th), Australia (5th),
the Netherlands (7th), Switzerland (8th), and Belgium xiii
(10th). Both Canada (6th) and Japan (9th) maintained
their overall rank from last year.
An important finding from this year’s Index results
can be seen in the context of the current economic
environment: emerging market economies are now the
primary driver of global economic growth and, at cur-
rent rates, could generate the majority of absolute GDP
growth over the next five years. Although this finding is
encouraging in many respects, it also points toward
some risks: the financial systems in many of these
countries are less developed than those in advanced
economies. On average, emerging market economies
scored 1.3 points lower than advanced economies in the
Index (see Figure 1, a comparison of GDP growth and
this year’s Index scores.)
Although financial stability has been a relative
advantage for many emerging market economies over
the last several years, their performance in other areas of
the Index may increasingly constrain economic growth
at the country and global level. The risks to economic
growth posed by these development areas can be seen
in the following critical areas:
• Long-term financing for infrastructure. Banks may
be increasingly limited in their ability to provide
the tenor and amount of financing needed to fund
significant infrastructure needs. The development of
capital markets in many emerging markets may be
necessary to fill this gap. Additionally, weaknesses in
 Executive Summary

Figure 1: Absolute GDP growth vs. Financial
Development Index 2010 score
l Average FDI score
$8
$7.7 trillion
in the institutional environments or financial stability
of global financial centers such as United States and
United Kingdom persist or worsen, this will only add
to the urgency of developing financial systems in other
countries to promote sustained economic growth
n Absolute GDP growth
worldwide.
5

4.45
(2010–2014, US$ trillions)

4
Absolute GDP growth

Overall FDI score

$7

$6.5 trillion
3.16 3

$6
2

$5 1
Emerging Advanced
markets economies

Source: GDP data taken from IMF, World Economic Outlook Database, April
2010.

xiv
the institutional environments of many economies
will need to be addressed to increase the willingness
of investors to commit long-term capital.

• Deep and accessible local bond markets. The local

bond markets in many Asian and Latin American
countries are not as developed as other parts of
their financial systems. This can limit the availability
of capital for important sectors, such as small- and
medium-sized enterprises (SMEs) (Chapter 1.3
discusses some of the obstacles to SME financing).
Additionally, strong local bond markets can be an
important defense against the harmful effects of
volatile capital flows (please see Chapter 1.2 for a
discussion of capital flows, capital controls, and
financial development).

• The extension of retail financial access. As seen in

many Asian and some Latin American countries,
poor access to retail financial services for consumers
may hinder efforts to stimulate local demand that
could help offset global economic imbalances.
Savings, credit (including mortgages), and insurance
can help increase and smooth the spending of con-
sumers who will be increasingly critical to sustain-
ing economic growth.

The recent financial crisis has underscored the

interconnected nature of financial systems. If weaknesses
Part 1
Findings from the Financial
Development Index 2010

CHAPTER 1.1
The Financial Development
Index 2010: Unifying the
Narratives of Reform
JAMES BILODEAU, World Economic Forum USA
IBIYE HARRY, World Economic Forum USA
1.1: The Financial Development Index 2010
Continued global financial uncertainty has underscored
the complexity and interconnectedness of financial sys-
tems. Financial instability originally emanating primarily
from the US mortgage markets several years ago has
proceeded to manifest itself in a number of other asset
classes and regions, most recently in sovereign debt in
the euro zone.1 Economies continue to grapple with
questions of financial reform that must be considered in
tandem with other fundamental questions, such as how
to drive sustained economic growth and promote fiscal
responsibility.
This complexity is also illustrated by the degree to
which the actions of different stakeholders have im-
pacted the functioning of financial systems. The indebt-
edness of both individuals and sovereign entities, risk
management by financial institutions, the originate-and-
distribute model facilitated by the “shadow” banking
system, oversight by regulators, and the promotion of
exports through exchange rate policy by lawmakers
have all been cited as factors influencing the develop-
ment of financial systems in the last several years. Some
recent research also traces the root cause of current finan-
cial instability to broader societal and economic ques-
tions such as the failure to address income inequality
through investments in human capital and education.2
As countries move from an immediate response to
financial crisis to the implementation of longer-term 3
policies that will influence the shape of financial systems
for years to come, it is important to view these actions
while keeping in mind this complexity of financial sys-
tems and the factors and stakeholders that influence
them. This includes objectively assessing which measures
will most improve overall financial development over
the long term; how they will affect the different stake-
holders within financial systems; and, ultimately, how
they will further economic prosperity for all participants
in the global economy. Empirical studies concerning
financial development and growth have generally found
that cross-country differences in levels of financial devel-
opment explain a considerable portion of the cross-
country differences in growth rates of economies.3
It is in this context that the third annual Financial
Development Report aims to provide policymakers with
a common framework to identify and discuss the range
of factors that are central to the development of global
financial systems and markets. It provides the Financial
Development Index (FDI), which ranks 57 of the
world’s leading financial systems and can be used by
countries to benchmark themselves and establish pri-
orities for financial system improvement. The Financial
Development Report is published annually so that coun-
tries can continue to benchmark themselves against their
peers and track their progress over time.
In recognition of the diversity of economies cov-
ered in the FDI and the variety of financial activities
that are vital to economic growth, the FDI provides a
holistic view of financial systems. For the purposes of
1.1: The Financial Development Index 2010
this Report and the FDI, we have defined financial devel-
opment as the factors, policies, and institutions that lead to
effective financial intermediation and markets, as well as deep
and broad access to capital and financial services. This defini-
tion thus spans the foundational supports of a financial
system, including the institutional and business environ-
ments; the financial intermediaries and markets through
which efficient risk diversification and capital allocation
occur; and the results of this financial intermediation
process, which include the availability of, and access to,
capital.
The FDI relies upon current academic research in
both selecting the factors that are included and in deter-
mining its overall structure. This encompasses a variety
of measures intended to capture different dimensions of
financial stability that have been highlighted in the cur-
rent crisis. However, consistent with its purpose of sup-
porting the long-term development of financial systems
and their central role in economic growth, it also
encourages a broad analysis over a theoretical focus
on a few specific areas. With this holistic view, decision
makers can develop a balanced perspective as to which
aspects of their country’s financial system are most
important and empirically calibrate this view relative
to other countries.
4 ital accumulation (the rate of investment) and on tech-
Financial development and economic growth
A large body of economic literature supports the prem-
ise that, in addition to many other important factors, the
performance and long-run economic growth and wel-
fare of a country are related to its degree of financial
development. Financial development is measured by fac-
tors such as size, depth, access, and the efficiency and
stability of a financial system, which includes its markets,
intermediaries, range of assets, institutions, and regula-
tions. The higher the degree of financial development,
the wider the availability of financial services that allow
the diversification of risks. This increases the long-run
growth trajectory of a country and ultimately improves
the welfare and prosperity of producers and consumers
that have access to financial services. The link between
financial development and economic growth can be
traced back to the work of Joseph Schumpeter in the
early 20th century,4 and more recently to Ronald
McKinnon and Edward Shaw. This link is now well
established in terms of empirical evidence.5
The slow economic recovery for many countries
since the onset of the recent crisis has underscored
the negative impacts that financial systems can have on
economic growth; in general, economic recoveries after
financial crises have been shown to be much slower
than those that occur after recessions not associated with
financial crises.6 However, it is important to consider the
positive impact that broader financial development and
more dynamic financial systems can have on longer-
term economic growth as well. Research supports the
idea that countries that have experienced occasional
financial crises have, on average, demonstrated higher
economic growth than countries that have exhibited
more stable financial conditions.7 Financial innovation,
when undertaken prudently, can also be important to
effectively screen and allocate funds to new and pro-
ductive enterprises, particularly as technology evolves.8
Thus, although it is important to mitigate the short-
term impact of crises, it is also important to view
financial development in terms inclusive of, but
broader than, financial stability.
Economic theory suggests that financial markets
and intermediaries exist mainly because of two types of
market frictions: information costs and transaction costs.
These frictions lead to the development of financial
intermediaries and financial markets, which perform
multiple functions. Among these are facilitating the trad-
ing, hedging, diversification, and pooling of risk; provid-
ing insurance services; allocating savings and resources to
the appropriate investment projects; monitoring man-
agers and promoting corporate control and governance;
mobilizing savings efficiently; and facilitating the
exchange of goods and services.
Financial intermediation and financial markets
contribute directly to increased economic growth and
aggregate economic welfare through their effect on cap-
nological innovation. First, greater financial development
leads to greater mobilization of savings and its allocation
to the highest-return investment projects. This increased
accumulation of capital enhances economic growth.
Second, by appropriately allocating capital to the right
investment projects and promoting sound corporate
governance, financial development increases the rate of
technological innovation and productivity growth, fur-
ther enhancing economic growth and welfare.
Financial markets and intermediation also benefit
consumers and firms in many other ways that are not
directly related to economic growth. Access to financial
markets for consumers and producers can reduce pover-
ty, such as when the poor have access to banking ser-
vices and credit. The importance of microfinance can
be seen in this context. This access allows consumers to
smooth consumption over time by borrowing and/or
lending and stabilizes consumer welfare in the presence
of temporary shocks to wages and income. By con-
tributing to the diversification of savings and of port-
folio choices, it can also increase the return on savings
and ensure higher income and consumption opportuni-
ties. Insurance services can help mitigate a variety of
risks that individuals and firms face, thus allowing better
risk sharing of individual or even macroeconomic risks.9
The seven pillars of financial development
To understand and measure the degree of financial
development, one must consider all of the different
 1.1: The Financial Development Index 2010
Figure 1: Composition of the Financial Development Index

Financial Development Index

Factors, policies, Financial Financial access

and institutions intermediation

1. Institutional environment 4. Banking financial services 7. Financial access

2. Business environment 5. Non-banking financial services

3. Financial stability 6. Financial markets

Policymakers Financial End users

intermediaries of capital

Source: World Economic Forum.

factors that together contribute to the degree of depth
and efficiency of the provision of financial services.
Conceptually, in thinking about an index that measures
the degree of financial development, the various aspects
of development can be seen as seven “pillars” grouped
into three broad categories, as indicated in Figure 1:
1. Factors, policies, and institutions: the foundational
characteristics that allow the development of finan-
cial intermediaries, markets, instruments, and
services.
2. Financial intermediation: the variety, size, depth,
and efficiency of the financial intermediaries and
markets that provide financial services.
3. Financial access: access by individuals and busi-
nesses to different forms of capital and financial
services.
The seven pillars are organized and described below
according to these three categories. (See Appendix A
for the detailed structure of the FDI and a list of all
indicators.)
Factors, policies, and institutions
This first category covers those foundational features
that support financial intermediation and the optimal
provision of financial services and includes the first three
5
of the seven pillars: the institutional environment, the
business environment, and the degree of financial
stability.
First pillar: Institutional environment
The institutional environment encompasses the laws and
regulations that allow the development of deep and effi-
cient financial intermediaries, markets, and services as
well as the macroprudential oversight of financial sys-
tems. This includes the overall laws, regulations, and
supervision of the financial sector, as well as the quality
of contract enforcement and corporate governance.
Economic theory proposes that a strong institution-
al environment exists to alleviate information and trans-
action costs.10 Much empirical work has tackled issues
related to the importance of institutions and their
impact on economic activity in general. The presence of
legal institutions that safeguard the interests of investors
is an integral part of financial development.11 Reforms
that bolster a country’s legal environment and investor
protection are likely to contribute to a more efficient
financial sector.12 Accordingly, we have included vari-
ables related to the degree of judicial independence and
judicial efficiency.
The recent crisis has clearly emphasized the impor-
tance of regulation at the institutional level as it relates
to financial stability and corresponding effects on the
real economy. As highlighted in the recent financial cri-
sis, central banks play a critical role in the functioning
of financial systems and this year we have included
1.1: The Financial Development Index 2010
Box 1: Financial development, capital flows, and capital controls
(Please see Chapter 1.2 by Howard Davies and Michael Drexler for a full discussion of this topic.)
According to classic economic theory, capital flows from devel-
oped economies, which have a capital surplus, to developing
markets, which have a surplus of investment opportunities.
However, this orthodox economic view has been challenged
by a number of events. Research has also found that capital
has recently flowed from emerging economies, such as China
and the Middle East, to developed markets, such as the United
States.
Capital flows are a feature of globalization and offer
a number of worthwhile benefits. These include enabling
investors to promote the long-term allocation of resources and
providing liquidity and financing where needed. The question is
one of how to harness these benefits while mitigating potential
risks. Such risks are of particular concern for smaller
economies that are still in development. Capital flows that are
large relative to a local economy generally bring three dangers:
(1) inflation of bubbles, (2) currency mismatches, and (3) maturi-
ty or liquidity mismatches. Categories of resilience against
these risks include (1) deep local asset markets, (2) deep local
currency markets, and (3) well-developed local debt markets.
The Financial Development Index (FDI) can help
economies assess their resilience to episodes of excessive
measures related to central bank transparency.13 A meas-
ure of the effectiveness of regulation of securities
exchanges is also included. The degree to which coun-
tries coordinate or harmonize their regulatory regimes
internationally is also an important consideration.
However, since there is little in the way of cross-country
data that captures this in a uniform way, we are unable
to include a specific indicator for this—at least until fur-
ther research becomes available.
Better corporate governance is believed to encour-
age financial development, which in turn has a positive
impact on growth.14 Contract enforcement is also
important because it limits the scope for default among
debtors, which in turn promotes compliance. Variables
capturing these measures as they relate to the formal
transfer of funds from savers to investors are included in
the pillar.15 Inadequate investor protection leads to a
number of adverse effects, which can be detrimental to
external financing and ultimately to the development of
well-functioning capital markets.16 In general, inade-
quate enforcement of financial contracts has been found
to augment the process of credit rationing, thus hinder-
ing the overall process of growth.17
Other important aspects of the institutional environ-
ment are a country’s capital account openness and domes-
tic financial sector liberalization. Financial liberalization
generally permits a greater degree of financial depth,
which translates into greater financial intermediation
capital flow. An economy’s FDI scores in the three aforemen-
tioned resilience categories can be aggregated into a defensive
score and mapped against its GDP (see Figure 4, Chapter 1.2). If
the GDP is small and the defensive score is also small, an econ-
omy can be potentially at risk from speculative flows. As a
second step, it can also be insightful to map the relationship
between an economy’s defensive score and its advanced mar-
ket score, which aggregates selected variables from the FDI
related to the development of more advanced asset markets.
Despite the importance of the resilience measures previously
described, they might not prevent a capital flow episode that
threatens the systemic stability of a local economy.
Consequently, there can be circumstances where measures of
capital control are required. Historical episodes show that five
types of capital controls have been employed most frequently:
(1) unremunerated reserve requirements, (2) time requirements,
(3) quantitative limits, (4) direct tax on financial transactions,
and (5) the regulation of trade between residents and non-
residents. The efficacy of a capital control will depend on the
motivation of the speculators it is supposed to deter and also
on the state of the economy in which it is implemented.
among savers and investors. This in turn increases the
monetization of an economy, resulting in a more effi-
cient flow of resources.18 Empirically, however, the
impact of capital account liberalization delivers mixed
evidence. Several studies have asserted that capital
account liberalization has no impact on growth, while
others have found a positive, and statistically significant,
impact.19 At the same time, other work asserts that the
relationship is undetermined.
Given such ambiguity over the impact of capital
account openness, it is best examined within the
context of the legal environment. The better a country’s
legal and regulatory environment, the greater the bene-
fits from capital account openness—and vice versa.
Accordingly, within the FDI we try to capture the rela-
tionship between capital account openness and the level
of legal and regulatory development, and have interacted
the variables used to measure each (see Appendix A).
The presence of both a robust legal and regulatory sys-
tem and capital account openness provides a positive
indication of the financial development of a country. We
have also interacted the capital account openness vari-
able with the level of bond market development because
of research that asserts the importance of developing
domestic bond markets in advance of full liberalization
of the capital accounts.20 (Please see Box 1 for further
discussion of capital flows and capital controls in the
context of financial development.) Assessments of

commitment to WTO trade agreements as they relate to
financial services have also been included and interacted
in a similar manner.
A similar analysis can be extended to the degree of
liberalization of the domestic financial sector. This
degree of liberalization is based on whether a country
exerts interest rate controls (either ceilings or floors),
whether credit ceilings exist, and whether foreign cur-
rency deposits are allowed. In general, the better a coun-
try’s legal and regulatory environment, the greater the
impact of domestic financial sector liberalization on a
country’s economic growth. Variables representing each
of these characteristics have been interacted to represent
this result. Recent research supports the importance of
advanced legal systems and institutions in this respect,
holding that the presence of such institutions is as vital
as having both a developed banking sector and equity
markets.21
Second pillar: Business environment
The second pillar focuses on the business environment
and considers:
• the availability of human capital—that is, skilled
workers who can be employed by the financial
sector and thus provide efficient financial services;
• the state of physical capital—that is, the physical
and technological infrastructure; and
• other aspects of the business environment, including
taxation policy and the costs of doing business for
financial intermediaries.
The creation and improvement of human capital
have been found to assist the process of economic
growth.22 Empirical evidence supports this observation
and shows positive correlations between human capital
and the degree of financial development.23 Our proxies
for the quality of human capital are related to the
enrollment levels of tertiary education. We also include
measures that reflect the quality of human capital, such
as the degree of staff training, the quality of manage-
ment schools and math and science education, and the
availability of research and training services.
Another key area is infrastructure. We capture a
basic measure of the quality of physical infrastructure,
which is important given its role in enhancing the
process of private capital accumulation and financial
depth in countries by increasing the profitability of
investment.24 However, our analysis of infrastructure
emphasizes measures of information and communication
technologies, which are particularly important to those
firms operating within a financial context because of
their data-intensive nature.
Another integral aspect of the business environment
is the cost of doing business in a country. Specifically,
1.1: The Financial Development Index 2010
research has shown that the cost of doing business is a
vital feature of the efficiency of financial institutions.
The different costs of doing business are fundamental to
assessing a country’s business environment as well as the
type of constraints that businesses may be facing.25 As
such, the better the business environment, the better the
performance of financial institutions and the higher the
degree of financial development. Variables that capture
such costs include the World Bank’s measures of the cost
of starting a business, the cost of registering property,
and the cost of closing a business. Indirect or transaction
costs are captured in variables such as time to start a
business, time to register property, and time to close a
business.
Our analysis also considers taxes as another key
constraint that businesses in the financial sector can face.
The variables in this subpillar focus on issues related to
distortionary and burdensome tax policies, reflecting
clearer consensus around the importance of these issues.
High marginal tax rates have been found to have distor-
tionary effects, so we have included a variable to capture
this. Because there is less clarity in the academic litera-
ture around the effects of absolute rates of taxation and
issues of data comparability, we have not included meas-
ures related to overall tax rates.
Third pillar: Financial stability 7
The third pillar addresses the stability of the financial
system. The severe negative impacts of financial instabil-
ity on economic growth can be profoundly seen in the
recent financial crisis as well as in past financial crises.
This instability can lead to significant losses to investors,
resulting in systemic banking crises, systemic corporate
crises, currency crises, and sovereign debt crises.
This pillar captures the risk of three types of crises:
currency crises, systemic banking crises, and sovereign
debt crises. For the risk of currency crises, we include
the change in real effective exchange rate, the current
account balance, a dollarization vulnerability indicator,
an external vulnerability indicator, external debt to
GDP, and net international investment position. The
external debt to GDP and net international investment
position variables are specifically applied to developing
and developed countries, respectively.
The systemic banking crises subpillar combines
measures of historic banking system instability, an assess-
ment of aggregate balance sheet strength, and measures
of the presence of “bubbles.” Historic instability is cap-
tured in a measure of the frequency of banking crises
since the 1970s; more recent banking crises are given
greater weight. Empirical research has shown that coun-
tries that have gone through systemic banking crises or
endured a high degree of financial volatility are more
susceptible to profound short-term negative impacts on
the degree of financial intermediation.26 We also capture
the degree of economic output loss associated with
crises (weighting output loss from more recent crises
1.1: The Financial Development Index 2010
more heavily.) A Financial Stress Index also captures the
incidence of financial stress in countries that do not
reach the proportions of a full-blown crisis.27 It is
important that prudential regulation include the estab-
lishment of uniform capital adequacy requirements, and
accordingly we have included a measurement of Tier 1
capital in this subpillar.28 Some research indicates that
quantitative capital adequacy measures are not always
accurate measures of the financial strength of banks in
developing countries.29 Accordingly, we have included a
financial strength indicator that balances quantitative
measures of balance-sheet strength with qualitative
assessments of banks’ abilities to meet their obligations
to depositors and creditors.
The last type of crisis captured within the financial
stability pillar is sovereign debt crisis. The manageability
of public debt defined as total public debt as a percent-
age of GDP is included in this pillar. The ability of
countries to pay this debt in full and in a timely manner
is captured in sovereign credit ratings, an important
proxy for the risk of such a crisis; these data were cal-
culated as an average of both local currency sovereign
credit ratings and foreign currency sovereign credit rat-
ings. A high sovereign credit rating signifies less likeli-
hood of default occasioned by a sovereign debt crisis.
Credit default swaps provide a quantitative, market-
8 based indicator of the ability of a country to repay its
debt. Macroprudential measures such as inflation and
GDP growth are also included, as these also influence
the ability of countries to service their debt.
The greater the risk of these crises, the greater the
likelihood that the different processes of financial inter-
mediation will be hampered, precipitating lower eco-
nomic growth rates. However, these effects of financial
stability on economic growth can be considered in
terms of a tradeoff between risk and innovation/return.
For example, a financial system that is very heavily
supervised and regulated may be very stable and never
spark a financial crisis. However, such a controlled sys-
tem would hamper the financial development and inno-
vation that increases returns, diversifies risks, and better
allocates resources to the highest-return investments.
Conversely, a financial system that is very free and inno-
vative and is very lightly regulated and supervised may
eventually become unstable and trigger credit booms
and asset bubbles that can severely affect growth,
returns, and welfare. Although there is some tradeoff
between the stability of the financial system and its
degree of innovation and sophistication, financial stabili-
ty remains an important input in the process of financial
development.
Financial intermediaries and markets
The second category of pillars measures the degree of
development of the financial sector as seen in the dif-
ferent types of intermediaries. These three pillars are
banking financial services, non-banking financial ser-
vices (e.g., investment banks and insurance firms), and
financial markets.
Consensus exists on the relationship between the
size and depth of the financial system and the supply
and robustness of financial services that are important
contributors to economic growth.30 This relationship
occurs because the size of financial markets is viewed as
an important determinant of savings and investment.31
The size (total financial assets within a country) of the
financial system also matters because the larger it is, the
greater its ability to benefit from economies of scale,
given the significant fixed costs prevailing in financial
intermediaries’ activities. A larger financial system tends
to relieve existing credit constraints. This facilitates bor-
rowing by firms and further improves the process of
savings mobilization and the channeling of savings to
investors. Given that a large financial system should allo-
cate capital efficiently and better monitor the use of
funds, improved accessibility to financing will tend to
amplify the resilience of an economy to shocks.
Thus, a deeper (total financial assets as a percentage
of GDP) financial system is an important component of
financial development as it contributes to economic
growth rates across countries.32 Measures of size and
depth have been included in each of the three financial
intermediation pillars to capture this factor.
Fourth pillar: Banking financial services
Although the previous pillar captures some of the nega-
tive impacts that an unstable banking system can have
on an economy, banks also play a vital role in supporting
economic growth. This role is captured in the fourth
pillar. Bank-based financial systems emerge to improve
acquisition of financial information and to lower trans-
action costs, as well as to allocate credit more effi-
ciently. This role is especially important in developing
economies.
The efficient allocation of capital in a financial sys-
tem generally occurs through bank-based systems or
market-based financial systems.33 Some research asserts
that banks finance growth more effectively and effi-
ciently than market-based systems, particularly in under-
developed economies where non-bank financial inter-
mediaries are generally less sophisticated.34 Research
also shows that, compared with other forms of financial
intermediation, well-established banks form strong ties
with the private sector, a relationship that enables them
to acquire information about firms more efficiently and
to persuade firms to pay their debts in a timely man-
ner.35 Advocates of bank-based systems argue that banks
that are unimpeded by regulatory restrictions tend to
benefit from economies of scale in the process of col-
lecting information and can thus enhance industrial
growth. Banks are also seen as key players in eradicating
liquidity risk, which causes them to increase investments

in high-return, illiquid assets and speed up the process
of economic growth.36
One of the key measures of the efficacy of the
banking system captured in this pillar is size. The larger
the banking system, the more capital can be channeled
from savers to investors. This enhances the process of
financial development, which in turn leads to greater
economic growth. These measures of size span deposit
money bank assets to GDP, M2 to GDP, and private
credit to GDP. Another key aspect of the banking sys-
tem is its efficiency. Direct measures of efficiency cap-
tured in the Index are aggregate operating ratios, such
as bank operating cost to assets and the ratio of non-
performing loans to total loans. An indirect measure of
efficiency is public ownership. Publicly owned banks
tend to be less efficient, impeding the processes of credit
allocation and channeling capital, which in turn slows
the process of financial intermediation.
Measures of operating efficiency may provide an
incomplete picture of the efficacy of the banking system
if it is not profitable. We have thus also included an
aggregate measure of bank profitability. Conversely, if
banks are highly profitable while performing poorly in
the operating measures, then this may indicate a lack of
competition along with undue and high inefficiency.
A third key aspect of the efficacy of the banking
system captured by this pillar is the role of financial
information disclosure within the operation of banks.
Policies that induce correct information disclosure and
that authorize private-sector corporate control of banks,
as well as motivate private agents to exercise corporate
control, tend to encourage bank development, opera-
tion, and stability.37 This has a positive effect on the
overall economy.
Fifth pillar: Non-banking financial services
Non-bank financial intermediaries—such as broker
dealers, traditional asset managers, alternative asset man-
agers, and insurance companies—can be both an impor-
tant complement to banks and a potential substitute for
them. Their complementary role lies in their efforts to
fill any vacuum created by commercial banks. Their
competition with banks allows both parties to operate
more efficiently in meeting market needs. Activities of
non-bank financial intermediaries include their partici-
pation in securities markets as well as the mobilization
and allocation of financial resources of a longer-term
nature—for example, in insurance activities. Because
of inadequate regulation and oversight, certain non-
banking financial services, such as securitization, played
a detrimental role in the current financial crisis as part
of the so-called shadow banking system. However,
within the context of a sound legal and regulatory
framework, they fulfill unique and vital roles as financial
intermediaries.
The degree of development of non-bank financial
intermediaries in general has been found to be a good
1.1: The Financial Development Index 2010
proxy of a country’s overall level of financial develop-
ment.38 Empirical research has found that banks as well
as non-bank financial intermediaries are larger, more
active, and more efficient in advanced economies.39
Advocates of the market-based system (i.e., non-banks)
point to the fact that it is able to finance innovative and
high-risk projects.40 There are three main areas of non-
bank financing activity that we capture in the Index:
initial public offering (IPO), merger and acquisitions
(M&A) activity, and securitization activity.
Additionally, we include a number of variables on
the insurance sector, which can facilitate trade and com-
merce by providing ample liability coverage. Insurance
also creates liquidity and facilitates the process of build-
ing economies of scale in investment, thereby improving
overall financial efficiency.41 And insurance has been
found to mobilize illiquid savings to positively affect
growth.42
Sixth pillar: Financial markets
The four major types of financial markets include bond
markets (both for government and corporate bonds),
stock markets where equities are traded, foreign
exchange markets, and derivatives markets.
Stock market liquidity is statistically significant in
terms of its positive impact on capital accumulation,
productivity growth, and current and future rates of 9
economic growth.43 More generally, economic theory
suggests that stock markets encourage long-run growth
by promoting specialization, acquiring and disseminating
information, and mobilizing savings in a more efficient
way to promote investment.44 Research also shows that
as countries become richer, stock markets become more
active and efficient relative to banks.45 Bond markets
have received little empirical attention, but recent
research has shown that bond markets play an important
role in financial development and the effective allocation
of capital.46
Derivatives markets are an important aspect of this
pillar because they can significantly improve risk man-
agement and risk diversification. The development of
derivatives markets can enhance the confidence of inter-
national investors and financial institutions and encour-
age these agents to participate in them. Derivatives
markets generally are small in emerging markets. The
strengthening of the legal and regulatory environment
can enhance the development of such markets.47
Financial access
This third and final category is comprised of one pillar
that represents measures of access to capital and financial
services.
Seventh pillar: Financial access
The measures represented in this last pillar span meas-
ures of access to capital through both commercial and
1.1: The Financial Development Index 2010
Box 2: SME finance: What have we learned and
what do we need to learn?
(Please see Chapter 1.3 by Thorsten Beck for a full discussion of this
topic.)
The availability of financing to small- and medium-sized en-
terprises (SMEs) has recently gained prominence in policy-
makers’ debates. The rising profile of this topic has been
reflected in a number of realms including discussions on
financial sector reform and the G-20’s establishment of an
SME finance committee.
Empirical research shows that SMEs are more con-
strained by financing and other institutional obstacles than
are large enterprises. These constraints are exacerbated by
weaknesses in the financial systems of many developing
countries. An access possibilities frontier can be used to
explain how difficulties in managing risk and transaction
costs involved in SME lending make financial institutions and
markets very reluctant to reach out to this group of enterpris-
es, especially in developing countries. The frontier is defined
as the maximum share of SMEs that can be served by finan-
cial institutions in a commercially viable way. The location of
the frontier in a particular economy, and thus the share of
bankable SMEs, is determined by technology as well as by
the institutional framework within which financial institutions
operate.
A number of different business models and lending
10
techniques, as well as policies and reforms, can entice
financial institutions and markets to lend to SMEs. Despite a
traditional focus on relationship lending, research has found
that both relationship- and transaction-based lending tech-
niques are appropriate for SME lending. With respect to
policymaking, three policy categories exist in expanding
SMEs’ access to external finance. Market-developing poli-
cies can help push out the frontier, market-enabling policies
push incumbent and new financial institutions toward the
existing frontier, while market-harnessing policies prevent
the financial system from moving beyond the frontier toward
a point of financial fragility.
The access possibilities frontier allows for a more rigor-
ous analysis of obstacles to SME finance in a specific coun-
try. However, this analysis must also take into account the
differing size and nature of SMEs across countries.
retail channels. Empirically, greater access to financial
services has been associated with the usual proxies for
financial development and the resulting economic
growth.48 The presence of financial services per se as
reflected by size and depth does not imply their accessi-
bility by the different types of users within an economy.
Thus, the presence of access becomes integral to our
analysis.
We separate our access measures within this pillar
into retail and commercial access measures in light of
the different channels (and issues) associated with each.
Commercial access includes measures such as access to
venture capital, commercial loans, and the local equity
markets. Retail access includes measures such as the
penetration of bank accounts and ATMs and access to
microfinance; these data were provided by the
Consultative Group to Assist the Poor and the
Microfinance Information Exchange.
Given the importance of small- and medium-sized
enterprises (SMEs) in driving economic growth in
many countries, the importance of financial access for
SMEs has recently been highlighted by organizations
such as the G-20. Please see Box 2 and the subsequent
chapter by Thorsten Beck for a full discussion of some
of the financial access issues faced by SMEs. Depending
on how they are defined (and they are defined differ-
ently across many countries), SMEs can have financial
needs that can be viewed from the perspective of both
retail and commercial access. There is a shortage of
global data related to SME finance, but the G-20 and
other multilateral organizations have highlighted this
need; when new data become available we will incorpo-
rate them into the Index.
Performance in the other pillars contributes to per-
formance in this pillar and to the extent of access to
financial services by end users. Accessibility, along with
the size and depth of the financial system as a whole
captured in the previous pillars, has a significant effect
on a country’s real activity, economic growth, and over-
all welfare.
Adjustments to the Financial Development Index
this year
The overall structure of the Financial Development
Index remains the same as that used in last year’s Report.
There are still seven pillars in the Index with the same
associated subpillars in each. Each of these subpillars
contains the constituent variables that make up the
Index. Appendix A lays out the complete structure and
methodological detail for the Index.
We have made some minor improvements to the
Index this year at the variable level. We have added three
indicators to enhance the banking system stability sub-
pillar. A measure of output loss during banking crises
provides an indication of the depth of past crises in
terms of their effect on overall economic output. A
Financial Stress Index indicates the degree to which a
financial system is under strain irrespective of the exis-
tence of a full-blown crisis. The inclusion of the Tier 1
capital ratio provides a measure of capital adequacy
within the banking system. We removed the manage-
ability of private debt variable from last year’s Report as
it was based on securitized debt, which did not provide
a sufficiently consistent measure of debt across all coun-
tries in our sample.
 1.1: The Financial Development Index 2010
We have enhanced the non-banking financial serv- Table 1: The Financial Development Index 2010
ices pillar by adding some insurance-related variables. rankings: Comparison with 2009
Two variables provide better measurement of the non-
2010
life insurance market in terms of both density and 2010 2009 score Change
Country/Economy rank rank (1–7) in score
coverage. We have also added a variable related to life
United States 1 3 5.12 –0.01
insurance coverage. Given the importance of local bond
United Kingdom 2 1 5.06 –0.22
markets as a source of capital within economies, we
Hong Kong SAR 3 5 5.04 +0.06
also added a measure of local currency corporate bond Singapore 4 4 5.03 +0.01
issuance to GDP within the bond markets subpillar. Australia 5 2 5.01 –0.12
We removed two variables related to the corporate Canada 6 6 4.98 +0.02
governance subpillar within the institutional environ- Netherlands 7 8 4.73 –0.12
ment pillar—official supervisory power and private Switzerland 8 7 4.71 –0.21

monitoring of the banking industry—because of a Japan 9 9 4.67 +0.03

Belgium 10 13 4.65 +0.15
lack of updated data.
France 11 11 4.63 +0.06
We have also added two countries to the Index:
Sweden 12 14 4.60 +0.11
Morocco and Romania. This raises the total number Germany 13 12 4.49 –0.05
of countries covered in the Index from 55 to 57. Spain 14 15 4.42 +0.02
Accordingly, this will lower the year-on-year ranks of Norway 15 17 4.31 –0.06
countries that score below either of these countries. Denmark 16 10 4.30 –0.34
Malaysia 17 22 4.20 +0.23
Ireland 18 16 4.20 –0.19

The Financial Development Index 2010 rankings Austria 19 18 4.20 –0.09

Finland 20 19 4.12 –0.12
The overall ranking for this year’s Financial Development
United Arab Emirates 21 20 4.03 –0.18
Report can be seen in Table 1, along with the 2009 rank-
China 22 26 4.03 +0.16
ing, the Index score, and the change in score from last Bahrain 23 27 4.00 +0.15
year. Looking broadly across the results for the 57 coun- Korea, Rep. 24 23 4.00 +0.09
tries covered in the Index, there are some overall trends Italy 25 21 3.95 –0.03 11
that emerge. Saudi Arabia 26 24 3.87 –0.02
Israel 27 28 3.85 +0.16

Overall trends in 2010 rankings Kuwait 28 30 3.69 +0.07

Jordan 29 25 3.65 –0.24
In comparing Index scores from 2009 and 2010, we see
Chile 30 31 3.53 –0.06
a fairly even split between countries that have advanced
South Africa 31 32 3.53 +0.05
and those that have declined. The top-ranked countries Brazil 32 34 3.53 +0.06
within the Index do not change significantly, although Czech Republic 33 33 3.46 –0.02
the United States does take the top spot from the Thailand 34 35 3.37 +0.03
United Kingdom (2nd); the US score remains essentially Poland 35 39 3.33 +0.06
unchanged from last year, while the United Kingdom’s Slovak Republic 36 37 3.30 0.00
India 37 38 3.24 –0.05
drops the most of any country within the top 10. It is
Egypt 38 36 3.24 –0.09
only very minor score differentials that separate the
Panama 39 29 3.22 –0.41
United Kingdom from the next five countries that score Russian Federation 40 40 3.21 +0.05
below it—Hong Kong, Singapore, Australia, Canada, and Morocco 41 n/a 3.20 n/a
the Netherlands. Turkey 42 44 3.18 +0.15
In terms of the rest of the top 20, Denmark shows Mexico 43 43 3.07 +0.01
the biggest decline, falling from 10th to 16th place. Romania 44 n/a 3.05 n/a

Malaysia achieves a significant increase, moving from Hungary 45 41 3.04 –0.04

Vietnam 46 45 3.03 +0.04
22nd to 17th place, earning its place as the only emerg-
Colombia 47 46 3.02 +0.08
ing market in the top 20 of the Index.
Peru 48 42 3.01 –0.06
All of the BRIC country rankings either improve Kazakhstan 49 47 2.98 +0.05
slightly or stay the same. China shows the biggest Philippines 50 50 2.97 +0.14
advance, moving up four spots to 22nd place. Brazil Indonesia 51 48 2.90 0.00
(34th) moves up two spots, India (37th) one spot, and Argentina 52 51 2.78 +0.01
Russia stays the same at 40th place. Ukraine 53 53 2.76 +0.05

As with past years, there can be considerable varia- Pakistan 54 49 2.62 –0.23
Bangladesh 55 54 2.55 –0.02
tion across the seven pillars for specific countries, as can
Venezuela 56 55 2.55 +0.03
be seen in the pillar results in Table 2. For instance,
Nigeria 57 52 2.43 –0.29
Sweden, Norway, and Denmark all achieve top ranks in
the Institutional environment pillar (2nd, 3rd, and 4th
1.1: The Financial Development Index 2010

Table 2: Financial Development Index 2010

OVERALL INDEX FACTORS, POLICIES, AND INSTITUTIONS

1st pillar: Institutional environment 2nd pillar: Business environment 3rd pillar: Financial stability
Country/Economy Rank Score Country/Economy Rank Score Country/Economy Rank Score Country/Economy Rank Score

United States 1 5.12 Singapore 1 6.08 Sweden 1 5.99 Saudi Arabia 1 6.11
United Kingdom 2 5.06 Sweden 2 6.05 Singapore 2 5.91 Hong Kong SAR 2 5.75
Hong Kong SAR 3 5.04 Norway 3 5.88 Hong Kong SAR 3 5.89 Malaysia 3 5.68
Singapore 4 5.03 Denmark 4 5.88 Finland 4 5.87 Singapore 4 5.66
Australia 5 5.01 Canada 5 5.87 Switzerland 5 5.80 Switzerland 5 5.64
Canada 6 4.98 United Kingdom 6 5.79 Denmark 6 5.79 United Arab Emirates 6 5.48
Netherlands 7 4.73 Finland 7 5.78 Canada 7 5.72 Chile 7 5.38
Switzerland 8 4.71 Germany 8 5.78 Netherlands 8 5.66 Norway 8 5.37
Japan 9 4.67 Netherlands 9 5.76 Norway 9 5.62 Australia 9 5.21
Belgium 10 4.65 Hong Kong SAR 10 5.70 France 10 5.56 Brazil 10 5.15
France 11 4.63 Switzerland 11 5.66 Belgium 11 5.54 France 11 5.13
Sweden 12 4.60 Austria 12 5.66 Germany 12 5.51 Finland 12 5.09
Germany 13 4.49 Belgium 13 5.59 Australia 13 5.48 Canada 13 5.03
Spain 14 4.42 United States 14 5.58 Bahrain 14 5.45 Slovak Republic 14 4.98
Norway 15 4.31 Ireland 15 5.55 United Kingdom 15 5.45 Mexico 15 4.98
Denmark 16 4.30 Japan 16 5.54 Austria 16 5.37 Morocco 16 4.95
Malaysia 17 4.20 France 17 5.51 United States 17 5.37 China 17 4.93
Ireland 18 4.20 Australia 18 5.47 Ireland 18 5.36 Kuwait 18 4.91
Austria 19 4.20 Israel 19 5.13 Korea, Rep. 19 5.33 Belgium 19 4.83
Finland 20 4.12 Malaysia 20 5.05 Japan 20 5.13 Peru 20 4.82
United Arab Emirates 21 4.03 Bahrain 21 5.01 United Arab Emirates 21 5.11 Austria 21 4.80
China 22 4.03 Spain 22 4.96 Saudi Arabia 22 5.02 Czech Republic 22 4.79
Bahrain 23 4.00 United Arab Emirates 23 4.78 Spain 23 4.87 Bahrain 23 4.73
Korea, Rep. 24 4.00 Hungary 24 4.59 Italy 24 4.76 Germany 24 4.72
12 Italy 25 3.95 Jordan 25 4.47 Hungary 25 4.75 Thailand 25 4.71
Saudi Arabia 26 3.87 Romania 26 4.47 Romania 26 4.74 Denmark 26 4.67
Israel 27 3.85 Chile 27 4.46 Slovak Republic 27 4.68 Sweden 27 4.62
Kuwait 28 3.69 South Africa 28 4.42 Czech Republic 28 4.67 South Africa 28 4.56
Jordan 29 3.65 Saudi Arabia 29 4.36 Turkey 29 4.62 Poland 29 4.55
Chile 30 3.53 Italy 30 4.32 Malaysia 30 4.59 Bangladesh 30 4.52
South Africa 31 3.53 Thailand 31 4.32 Chile 31 4.53 Netherlands 31 4.51
Brazil 32 3.53 Panama 32 4.28 Kuwait 32 4.51 Israel 32 4.47
Czech Republic 33 3.46 Czech Republic 33 4.20 Israel 33 4.45 Japan 33 4.46
Thailand 34 3.37 Korea, Rep. 34 4.11 Russian Federation 34 4.43 Colombia 34 4.44
Poland 35 3.33 China 35 4.08 Poland 35 4.42 Egypt 35 4.39
Slovak Republic 36 3.30 Poland 36 4.04 Colombia 36 4.33 Indonesia 36 4.39
India 37 3.24 Kuwait 37 3.87 Thailand 37 4.29 Philippines 37 4.38
Egypt 38 3.24 Egypt 38 3.85 China 38 4.26 Italy 38 4.29
Panama 39 3.22 Turkey 39 3.82 Kazakhstan 39 4.16 United States 39 4.26
Russian Federation 40 3.21 Slovak Republic 40 3.81 Panama 40 4.14 Venezuela 40 4.25
Morocco 41 3.20 Peru 41 3.67 Morocco 41 4.02 Jordan 41 4.20
Turkey 42 3.18 Philippines 42 3.64 Argentina 42 4.02 Russian Federation 42 4.17
Mexico 43 3.07 Nigeria 43 3.63 Jordan 43 3.96 Korea, Rep. 43 4.15
Romania 44 3.05 Brazil 44 3.61 Ukraine 44 3.94 Panama 44 4.09
Hungary 45 3.04 Vietnam 45 3.58 South Africa 45 3.92 India 45 4.03
Vietnam 46 3.03 Indonesia 46 3.54 Mexico 46 3.90 United Kingdom 46 3.99
Colombia 47 3.02 Colombia 47 3.52 Peru 47 3.83 Spain 47 3.94
Peru 48 3.01 Mexico 48 3.51 Egypt 48 3.81 Vietnam 48 3.87
Kazakhstan 49 2.98 Morocco 49 3.37 Brazil 49 3.80 Kazakhstan 49 3.82
Philippines 50 2.97 Kazakhstan 50 3.23 Pakistan 50 3.60 Romania 50 3.77
Indonesia 51 2.90 India 51 3.21 Vietnam 51 3.47 Turkey 51 3.70
Argentina 52 2.78 Argentina 52 3.21 India 52 3.35 Pakistan 52 3.65
Ukraine 53 2.76 Russian Federation 53 3.15 Philippines 53 3.34 Ireland 53 3.60
Pakistan 54 2.62 Pakistan 54 2.94 Indonesia 54 3.22 Argentina 54 3.24
Bangladesh 55 2.55 Ukraine 55 2.83 Venezuela 55 3.07 Ukraine 55 3.13
Venezuela 56 2.55 Bangladesh 56 2.53 Nigeria 56 2.83 Nigeria 56 3.07
Nigeria 57 2.43 Venezuela 57 2.34 Bangladesh 57 2.80 Hungary 57 2.89
 1.1: The Financial Development Index 2010
Table 2: Financial Development Index 2010 (cont’d.)

FINANCIAL INTERMEDIATION FINANCIAL ACCESS

4th pillar: Banking 5th pillar: Non-banking

financial services financial services 6th pillar: Financial markets 7th Pillar: Financial access
Country/Economy Rank Score Country/Economy Rank Score Country/Economy Rank Score Country/Economy Rank Score

United Kingdom 1 5.36 United States 1 6.07 United States 1 5.83 Australia 1 5.22
Netherlands 2 5.34 United Kingdom 2 5.51 Singapore 2 5.08 Hong Kong SAR 2 5.11
Hong Kong SAR 3 5.33 Canada 3 4.49 Switzerland 3 5.02 Belgium 3 5.07
Spain 4 5.24 China 4 4.45 United Kingdom 4 5.02 Saudi Arabia 4 4.73
Japan 5 5.17 Russian Federation 5 4.28 Japan 5 4.84 United States 5 4.70
Ireland 6 5.07 Korea, Rep. 6 4.15 Australia 6 4.68 Canada 6 4.67
Australia 7 5.06 Japan 7 4.14 France 7 4.56 Sweden 7 4.65
China 8 4.91 Australia 8 3.96 Netherlands 8 4.51 Austria 8 4.51
Belgium 9 4.88 Netherlands 9 3.65 Kuwait 9 4.41 Bahrain 9 4.48
Sweden 10 4.81 Spain 10 3.64 Germany 10 4.31 United Kingdom 10 4.30
Canada 11 4.76 Singapore 11 3.61 Hong Kong SAR 11 4.31 Norway 11 4.27
Malaysia 12 4.70 Brazil 12 3.56 Canada 12 4.30 Spain 12 4.27
Singapore 13 4.64 India 13 3.53 Belgium 13 4.07 Singapore 13 4.26
Bahrain 14 4.61 Germany 14 3.43 Spain 14 4.00 France 14 4.19
Switzerland 15 4.52 France 15 3.39 Italy 15 3.90 United Arab Emirates 15 4.08
Norway 16 4.33 Ireland 16 3.18 Denmark 16 3.78 Ireland 16 3.82
Germany 17 4.33 Hong Kong SAR 17 3.18 Sweden 17 3.64 Israel 17 3.74
Austria 18 4.21 Malaysia 18 3.17 Korea, Rep. 18 3.46 Vietnam 18 3.72
Denmark 19 4.19 South Africa 19 2.76 Jordan 19 3.34 Netherlands 19 3.69
United Arab Emirates 20 4.17 Switzerland 20 2.75 Finland 20 3.32 Malaysia 20 3.63
Israel 21 4.15 Italy 21 2.70 Austria 21 2.88 Egypt 21 3.61
Italy 22 4.13 Kazakhstan 22 2.55 Israel 22 2.82 Italy 22 3.59
France 23 4.09 Belgium 23 2.55 Ireland 23 2.82 Chile 23 3.56
Finland 24 4.08 Ukraine 24 2.48 India 24 2.81 Switzerland 24 3.56
13
Panama 25 4.03 Argentina 25 2.48 Malaysia 25 2.61 Denmark 25 3.52
Jordan 26 4.03 Sweden 26 2.40 Norway 26 2.60 China 26 3.44
United States 27 4.01 Poland 27 2.37 South Africa 27 2.45 Brazil 27 3.42
Korea, Rep. 28 3.96 United Arab Emirates 28 2.32 United Arab Emirates 28 2.30 Japan 28 3.38
Czech Republic 29 3.88 Jordan 29 2.30 Hungary 29 2.24 Germany 29 3.34
Kuwait 30 3.73 Denmark 30 2.27 China 30 2.14 Czech Republic 30 3.31
South Africa 31 3.68 Israel 31 2.21 Venezuela 31 2.13 Turkey 31 3.29
Morocco 32 3.63 Philippines 32 2.17 Thailand 32 2.05 Panama 32 3.27
Thailand 33 3.55 Egypt 33 2.14 Russian Federation 33 2.05 Slovak Republic 33 3.24
Saudi Arabia 34 3.53 Norway 34 2.13 Brazil 34 1.93 Jordan 34 3.22
Vietnam 35 3.49 Finland 35 2.12 Saudi Arabia 35 1.91 Bangladesh 35 3.12
Slovak Republic 36 3.41 Indonesia 36 2.07 Pakistan 36 1.90 Thailand 36 3.11
Chile 37 3.24 Colombia 37 2.06 Philippines 37 1.88 Hungary 37 3.05
Brazil 38 3.22 Bahrain 38 1.99 Egypt 38 1.87 Poland 38 3.05
Poland 39 3.13 Mexico 39 1.98 Turkey 39 1.87 Indonesia 39 3.02
Turkey 40 3.07 Austria 40 1.96 Romania 40 1.85 Romania 40 3.01
India 41 3.06 Turkey 41 1.90 Poland 41 1.76 Kuwait 41 2.99
Egypt 42 3.03 Morocco 42 1.89 Bahrain 42 1.74 Mexico 42 2.95
Argentina 43 2.93 Chile 43 1.86 Kazakhstan 43 1.71 South Africa 43 2.95
Kazakhstan 44 2.86 Czech Republic 44 1.73 Chile 44 1.71 Peru 44 2.93
Bangladesh 45 2.77 Venezuela 45 1.70 Morocco 45 1.63 Morocco 45 2.90
Philippines 46 2.75 Panama 46 1.65 Czech Republic 46 1.62 Korea, Rep. 46 2.86
Peru 47 2.73 Vietnam 47 1.65 Mexico 47 1.59 Colombia 47 2.81
Pakistan 48 2.69 Peru 48 1.63 Ukraine 48 1.56 Ukraine 48 2.77
Colombia 49 2.65 Thailand 49 1.60 Slovak Republic 49 1.51 India 49 2.72
Ukraine 50 2.62 Hungary 50 1.52 Vietnam 50 1.45 Philippines 50 2.65
Indonesia 51 2.61 Slovak Republic 51 1.46 Peru 51 1.45 Finland 51 2.58
Mexico 52 2.59 Kuwait 52 1.44 Indonesia 52 1.44 Nigeria 52 2.55
Nigeria 53 2.43 Romania 53 1.44 Argentina 53 1.40 Kazakhstan 53 2.55
Venezuela 54 2.40 Saudi Arabia 54 1.40 Colombia 54 1.35 Russian Federation 54 2.37
Hungary 55 2.21 Nigeria 55 1.25 Nigeria 55 1.21 Pakistan 55 2.32
Romania 56 2.11 Pakistan 56 1.25 Panama 56 1.11 Argentina 56 2.19
Russian Federation 57 2.05 Bangladesh 57 1.12 Bangladesh 57 1.01 Venezuela 57 1.97
1.1: The Financial Development Index 2010

Table 3: Financial stability: Top 20 economies limit their exposure to the global financial turmoil. As
described previously in this chapter, in some instances
2010
rank Economy Score financial stability may imply a tradeoff with healthy
1 Saudi Arabia 6.11 risk-taking or the efficient allocation of capital to the
2 Hong Kong SAR 5.75 highest-return investments. Also, notably, the risks that
3 Malaysia 5.68 can stem from a lack of financial development are
4 Singapore 5.66
broader in scope than financial crises or immediate
5 Switzerland 5.64
6 United Arab Emirates 5.48 financial instability. To illustrate this point further, we
7 Chile 5.38 will look at the relationship between economic growth
8 Norway 5.37 and financial development.
9 Australia 5.21
10 Brazil 5.15
11 France 5.13 Financial development and economic growth
12 Finland 5.09 In Figure 2, one sees a fairly strong correlation between
13 Canada 5.03 financial development and GDP per capita. As discussed
14 Slovak Republic 4.98
earlier in this chapter, the link between economic
15 Mexico 4.98
16 Morocco 4.95 growth and financial development is well established
17 China 4.93 in the academic literature.
18 Kuwait 4.91 A potentially more surprising finding can be
19 Belgium 4.83
observed when one considers the current global eco-
20 Peru 4.82
nomic environment. In the wake of the recent financial
crisis, many emerging-market economies have demon-
strated highly resilient and robust economic growth,
particularly when compared with that of developed
places, respectively) but do not make the top 10 in countries. The implication of this finding as it relates to
either the non-banking financial services pillar or the financial development can be seen in Figure 3. We have
financial markets pillar. Similarly, some emerging-market plotted the 57 countries covered by the Index in terms
14 economies achieve high scores in financial stability. In of the compound annual growth rate (CAGR) of their
Table 3 one sees that 8 of the top 20 economies in the GDP and their overall Index score. While the correla-
financial stability pillar are emerging markets. tion is not as tight as it is with GDP per capita, the basic
Many developing economies entered the recent conclusion is still obvious: many of the highest-growth
downturn with much stronger macroeconomic and economies also have the least-developed financial
financial fundamentals than they had in previous finan- systems.
cial crises. This included lower liability dollarization, The implication of this finding for individual coun-
lower fiscal and private debt, and a better aggregate tries is clear, and is one that this Report has aimed to
balance sheet for the financial services sector. For many address since its inception: countries must take a holistic
countries, such as Brazil, this was the result of effective approach in the assessment and improvement of their
macroeconomic and financial policy in the wake of past financial systems so they can continue to support eco-
crises, as well as generally favorable economic conditions nomic growth. Yet there are also broader implications for
that included higher commodity prices and strong capi- the global economy in light of the current fragile eco-
tal inflows in the period preceding the crisis. nomic recovery. In Figure 4 we have used IMF forecasts
However, it is important not to confuse financial of nominal GDP from 2010 to 2014 to create an esti-
stability as measured in the third pillar of the Index with mate of the absolute amount of GDP growth in emerg-
broader financial system development as measured in the ing markets (US$7.7 trillion) vs. advanced economies
overall Index. The broader Index looks at many different (US$6.5 trillion) over the next five years. By this rough
and often complex factors that support the long-term estimate, approximately 54 percent of global economic
development of the financial systems it assesses. Financial growth in the next five years could come from emerging
stability is only part of the assessment of how well markets. By contrast, the average FDI score for emerg-
financial systems in these countries contribute to overall ing markets is 3.16 vs. 4.45 for advanced economies.
economic growth by diversifying risks and efficiently Thus, in broadest terms the global economic recov-
allocating capital to those who most need it. Thus, we ery will be disproportionately affected by the perform-
see that many of those economies that do perform well ance of less-developed financial systems in emerging-
in the financial stability pillar do not perform nearly as market economies. Although many of these economies
well in other pillars in the Index. demonstrated a high degree of financial stability through
For some developing countries, which perform the recent financial crisis, there could be other potential
relatively well in this pillar but poorly in others, this risks for other aspects of their financial systems. A
result may represent the relative lack of integration and review of regional results of this year’s FDI suggests
development of their financial intermediaries, which what some of these risks might be.
 1.1: The Financial Development Index 2010
Figure 2: GDP per capita vs. Financial Development Index 2010

R2 = 0.63
5
FDI 2010 score

2
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

GDP per capita 2009 (US dollars)

Source: GDP data taken from IMF, World Economic Outlook Database, April 2010.

15
Figure 3: 2005–09 GDP CAGR vs. Financial Development Index 2010 score

10

8
2005–09 GDP CAGR

R2 = 0.26
2

0
2 3 4 5 6

–2

Overall FDI score

Source: GDP data taken from IMF, World Economic Outlook Database, April 2010.
Note: CAGR = compound annual growth rate.
1.1: The Financial Development Index 2010
Figure 4: Absolute GDP growth vs. Financial Development Index 2010 score
l Average FDI score
$8
Absolute GDP growth (2010–2014, US$ trillions)
$7.7 trillion
$7
3.16
$6
$5
Emerging markets
Source: GDP data taken from IMF, World Economic Outlook Database, April 2010.
16 Asian financial development and economic growth
Figure 5 shows a summary of the performance of Asian
economies (excluding Japan) across the seven pillars of
the FDI. China, India, and Hong Kong are broken out
separately, while the remaining Asian countries are aver-
aged together, weighted by GDP. As a well-established
global financial center, Hong Kong generally performs
significantly better than other countries. Financial sta-
bility is commonly a relative strength for all these
economies.
Some of the weaker pillar scores, however, begin to
reveal some potential risks that these financial systems
might pose for economic growth, both in the region
and globally. Relatively weak scores in the financial mar-
kets pillar and non-banking financial services pillar may
indicate an inability of capital markets to serve critical
financing needs in the future. In particular, scores in the
bond market subpillar were low in many of these coun-
tries. As the credit needs of companies in the region
continue to expand, the ability to tap local bond mar-
kets may become critically important. As described in
Chapter 1.2, deep local bond markets can also provide
an important bulwark against volatile cross-border
capital flows.
Many Asian countries have highlighted the critical-
ity of investing in infrastructure to support continued
economic growth. In many of these economies, the abil-
ity of banks to provide the tenor of financing needed to
support long-term investments in infrastructure is lim-
ited in the face of expanding need. Public investment
in infrastructure may also diminish as the provisions of
n Absolute GDP growth
5
4.45
4
Overall FDI score
$6.5 trillion
3
1
Advanced economies
stimulus packages begin to subside. A lack of deep local
bond markets could mean the absence of a critical
source of long-term financing.
Some of these weaknesses appear to translate into
low scores for financial access in some Asian countries,
because corporations indicate difficulty obtaining
financing through the capital markets relative to loans or
private credit. Retail financial access for consumers is
also an area of weakness for many of these economies.
The ability of Asian economies to stimulate domestic
demand could be hindered by limited access to savings
and demand accounts, consumer credit, mortgages, and
insurance. This in turn could affect the potential for
Asian consumer demand to offset global economic
imbalances that could threaten economic growth.
Latin American financial development and economic
growth
A summary of the performance of Latin American
countries across the seven pillars can be seen in Figure 6.
Brazil and Mexico are broken out separately, while the
other Latin American countries are averaged together,
weighted by GDP. There appears to be a relatively high
degree of uniformity in the performance of countries
across the pillars. As with the Asian economies, financial
stability is a clear strength.
By contrast, performance in the financial markets
and non-banking financial services pillars is relatively
low. (Brazil scored higher than other countries in the
non-banking financial services pillar because of a very
high level of IPO activity.) The development of deep
 1.1: The Financial Development Index 2010
Figure 5: Asian performance across pillars

7 n China
n India
6 n Hong Kong SAR
n Rest of Asia
5
FDI 2010 score

0
Pillar 1 Pillar 2 Pillar 3 Pillar 4 Pillar 5 Pillar 6 Pillar 7
Institutional Business Financial Banking Non-banking Financial Financial
environment environment stability financial financial markets access
services services

Note: Summary of results for Asian countries, excluding Japan. Rest of Asia consists of Bangladesh, Indonesia, Kazakhstan, Korea, Rep., Malaysia, Pakistan, the
Philippines, Singapore, and Vietnam, with results weighted by GDP.

Figure 6: Latin American performance across pillars 17

6 n Brazil
n Mexico
5 n Rest of Latin America
FDI 2010 score

0
Pillar 1 Pillar 2 Pillar 3 Pillar 4 Pillar 5 Pillar 6 Pillar 7
Institutional Business Financial Banking Non-banking Financial Financial
environment environment stability financial financial markets access
services services

Note: Rest of Latin America consists of Argentina, Chile, Colombia, Panama, Peru, and Venezuela, with results weighted by GDP.
1.1: The Financial Development Index 2010
local markets can be important to ensure that all sectors
within these economies are served. Research has shown
that in the absence of deep local markets, there are seg-
ments of the economy, particularly SMEs, that may not
be able to access capital as easily as larger corporations.49
Given that on average SMEs contribute 29 percent to
formal GDP in emerging markets, this could be a key
constraint to economic growth in the region.50
Similar to Asia, investment in infrastructure will be
essential to support the continued pace of economic
growth in Latin America. Local bond markets can pro-
vide an important source of disciplined long-term
capital to augment funding by banks and national
development banks such as BNDES (Brazilian
Development Bank).
Unlike Asian economies, Latin American economies
were not as weak in financial access as in the other pil-
lars. This was in part because of stronger scores with
respect to retail finance. However, access to commercial
finance proved weaker, particularly in Mexico where
severe constraints to many forms of capital—including
venture capital, private credit, loans, and equity markets—
exist. Although these Latin American economies exhibit
a high degree of financial stability, a limited availability
of capital could pose a major risk to economic growth
over the longer term.
18
Financial development risks in the United States and
United Kingdom
The United States and United Kingdom hold the num-
ber one and two spots in the FDI rankings, respectively.
The score of the United States remains nearly stagnant
and that of the United Kingdom actually goes down;
both countries’ performance is uneven across the differ-
ent pillars. In Table 4 we have summarized the perform-
ance of these two global financial centers. As in past
years, their top rankings are driven primarily by robust
performances in financial intermediation; both show
strength in non-banking financial services and financial
markets, and the United Kingdom shows a continued
advantage in banking (which, as noted previously,
includes measures of size and efficiency—financial
stability is captured elsewhere).
Their solid performances in financial intermedia-
tion contrasts with weak scores in other areas—in
Table 4 we have highlighted the pillars in which they
rank lower than 10. Financial stability remains a key
concern for these countries, which rank toward the bot-
tom of the Index. Other low scores indicate additional
areas that may be of concern over the longer term. The
business environment in both countries has deteriorated,
in large part because of poor performance with respect
to taxation. Legal and regulatory issues are a drag on the
institutional environment in the United States, and rela-
tively low efficiency pulls down banking performance in
the country.
We provide further detail on these countries later in
this chapter, but highlight some general issues here to
illustrate the broader risks that they might pose to global
economic growth. If the performance of these global
financial centers trends downward, it will heighten the
urgency of financial systems in emerging markets to
provide the effective financial intermediation and access
to capital that supports economic growth. Additionally,
the global nature of these two financial centers means
that they can, in some respects, serve as bellwethers for
financial systems elsewhere. Regulatory consistency and
coordination is more and more important in today’s
increasingly interconnected financial markets. If these
pre-eminent global financial centers adopt policies that
are inconsistent with the long-term development and
improved performance of financial systems—or, con-
versely, if they fail to take needed actions—then their
positive influence as models for financial systems else-
where would be compromised.
Regional analysis
While some high-level trends were highlighted earlier,
it is at the country level that some of the potentially
most useful findings from this Report can be seen. The
Country Profiles contained in Part 2 provide detailed
information with which to undertake this analysis. A
summary of highlights drawn from these profiles is pre-
sented below by region.
EUROPE AND NORTH AMERICA
The United States achieves top standing in the
Financial Development Index this year, although its
overall score does not change relative to 2009. The
United States continues to display a mix of contrast-
ing strengths and weaknesses across the seven pillars.
Strengths exist in financial intermediation, particularly
with respect to non-banking financial services (1st) and
financial markets (1st). This includes M&A activity (2nd)
and securitization (1st); the impact of the systemic risk
potentially created by some of these activities is not cap-
tured in the non-banking financial services pillar, but
rather in the financial stability pillar. The United States
has deep and active financial markets across the four
types captured in the Index. Size is an important com-
ponent of performance across these markets, but indica-
tors of activity such as stock market turnover (2nd),
stock market value traded (2nd), and spot foreign
exchange turnover (2nd) are also strengths. Financial
stability continues to be an area of great challenge for
the United States, where it achieves a low overall score
(39th). Particular weakness is evident in banking system
stability (52nd) and currency stability (41st) measures.
The banking system in general also exhibits signs of
difficulty, with relatively low scores in size (19th) and
 1.1: The Financial Development Index 2010
Table 4: Year-over-year changes in the Financial Development Index rank and score

UNITED KINGDOM UNITED STATES

2010 2009–10 2010 2009–10 2010 2009–10 2010 2009–10
FDI rank rank change FDI score score change FDI rank rank change FDI score score change

Pillar 1: Institutional environment 6 +9 5.79 +0.25 14 –3 5.58 –0.06

Pillar 2: Business environment 15 –3 5.45 –0.18 17 –7 5.37 –0.33
Pillar 3: Financial stability 46 –9 3.99 –0.58 39 –1 4.26 –0.30
Pillar 4: Banking financial services 1 +1 5.36 +0.03 27 –7 4.01 –0.20
Pillar 5: Non-banking financial services 2 –1 5.51 –0.85 1 +1 6.07 +0.14
Pillar 6: Financial markets 4 –2 5.02 –0.50 1 0 5.83 +0.18
Pillar 7: Financial access 10 +6 4.30 +0.28 5 +7 4.70 +0.51
Overall Index 2 –1 5.06 –0.22 1 +2 5.12 –0.01

Note: Data in blue bold indicate pillars where the rank is lower than 10.

efficiency (38th). Areas with a margin for improvement
in the business environment include the distortive effect
of taxes and subsidies on competition (46th) and the
quality of math and science education (30th).
The United Kingdom falls to 2nd place in the
Index, accompanied by a decrease in its overall score.
The country demonstrates contrasting strengths and
weaknesses in the pillars similar to the contrast seen in
the United States. Its financial intermediation pillars
show the greatest strength, offsetting drawbacks in other
areas. The United Kingdom’s poor performance in
financial stability (46th) is particularly driven by low
scores in banking system stability (54th) and currency
stability (45th). The country achieves top standing for
the size of its banking system, though it performs much
less well with respect to its efficiency (26th). Foreign
exchange (1st) and derivatives (1st) markets are areas of
particular strength within financial markets (4th). The
United Kingdom came in 3rd with respect to insurance,
achieving high marks in indicators such as life (3rd) and
non-life insurance density (4th). M&A activity (1st) is an
area of strength across measures of transaction value and
number of M&A deals; securitization is also quite strong
(2nd). Although the UK institutional environment is
fairly positive overall (6th), it demonstrates a need for
improvement across areas related to regulation and cor-
porate governance; this includes the centralization of
economic policymaking (46th), the burden of govern-
ment regulation (32nd), and the strength of auditing and
reporting standards (14th). Taxation (29th) is also a par-
ticular area of difficulty, as indicated by the country’s
high marginal tax rates and the distortive effect of taxes
and subsidies on competition.
Canada maintains its 6th-place ranking in the FDI
with a solid performance across all pillars of the Index.
Non-banking financial services is a particular asset;
Canada comes in 3rd, showing strength across the meas-
ures of securitization, IPO, and M&A activity. The coun-
try also demonstrates a good performance in the other
two financial intermediation pillars, banking financial
services (11th) and financial markets (12th). Despite its
degree of economic integration with the United States,
Canada continues to show clear divergence with respect
to financial stability, where it comes in 13th. The stabili-
ty of its banking system (8th) is a particular strength
within this pillar, although it is partially offset by an
inferior performance in currency stability (37th). In
terms of its institutional environment, Canada is consis-
tently solid across measures of corporate governance and
financial sector liberalization. Potential areas of improve-
ment in the business environment pillar include the dis-
tortive effect of taxes and subsidies on competition
(23rd) and marginal tax variation (27th).
The Netherlands rises one rank this year to 7th
place, delivering positive results across most of the FDI
pillars. One clear area of weakness is demonstrated in 19
the financial stability pillar (31st), where banking system
stability exhibits a particularly poor performance (45th).
The Netherlands scores high across all three of the
financial intermediation pillars: financial markets (8th)
and banking and non-banking financial services (2nd
and 9th, respectively). Within these pillars, the size of the
Dutch banking system (3rd) is an apparent strength, as is
the robust nature of Dutch equity and bond markets
(1st and 2nd). In addition to financial stability, a second
area in need of improvement exists in the financial
access pillar, where the Netherlands performs relatively
poorly on measures of commercial access (35th).
Neighboring Belgium has a weaker score in non-
banking financial services (23rd), but outperforms the
Netherlands in financial stability (19th) and financial
access (3rd). Belgium’s strong standing in the latter pillar
particularly reinforces its overall rank of 10th place.
Switzerland ranks 8th in the overall Index, with
notably strong scores in business environment and finan-
cial markets. Although the country feels the effects of
the recent crisis, it nonetheless performs very well with
respect to overall financial stability (5th). Potential areas
of improvement within the Swiss institutional environ-
ment include contract enforcement and the extent of
financial sector liberalization. Robust equity (2nd) and
foreign exchange (5th) markets drive Switzerland’s
strong performance in the financial markets pillar (3rd).
The size of its banking system is another source of
strength (7th), although opportunities for improvement
1.1: The Financial Development Index 2010
exist in its efficiency (23rd) and the degree of financial
disclosure (42nd).
France maintains its 11th place in the FDI, with
solid scores across most of the pillars. Its financial mar-
kets take 7th place, with clear advantages across deriva-
tives (1st), bonds (6th), and, to a lesser extent, foreign
exchange (9th). The country performs less well in bank-
ing financial services (23rd), primarily pulled down by
the smaller size of its banking sector and the more lim-
ited extent of financial information disclosure. France’s
financial system shows a relatively high degree of sta-
bility through the recent crisis, yielding an 11th-place
ranking in this pillar. Corporate governance (23rd) rep-
resents one area for development within France’s insti-
tutional environment, while the country’s business
environment displays relative weaknesses in the cost
and time involved in registering property (44th and
53rd).
Sweden (12th) and Norway (15th) show similarity
in their profiles with respect to strength in their institu-
tional and business environments, as well as in financial
access. The countries diverge in the area of financial sta-
bility; Norway achieves a ranking of 8th place in this
pillar, bolstered in particular by a lower risk of sovereign
debt crisis, while Sweden emerges at 27th place for
financial stability—weaknesses in the stability of
20 Sweden’s banking system (43rd) primarily drive the
country’s standing in this pillar.
Germany falls by one rank to 13th place in this
year’s Index, a decline driven mainly by weakened
financial stability (24th). Banks in Germany continue to
face challenges with respect to efficiency, scoring a rela-
tively low 32nd place in this measure. In contrast, the
country displays strength in its financial markets, ranking
10th in this pillar. Additional areas of strength are seen
in Germany’s institutional and business environments,
specifically financial sector liberalization (1st) and infra-
structure (4th). Potential development areas include for-
eign direct investment relative to GDP (50th) and easier
access to credit (49th). Germany’s equity markets (24th)
could also be further strengthened. Neighboring
Denmark takes 16th place, a drop of six places that is
accompanied by a decline in its overall score. The coun-
try’s institutional (4th) and business (6th) environments
are advantages, driven primarily by solid scores in issues
of regulation and governance as well as infrastructure.
Performance across the financial intermediation pillars is
less strong, with limited IPO activity (49th) and Danish
banks demonstrating an area for improvement in their
degree of financial information disclosure (52nd).
Austria and Finland follow each other in the rank-
ings once again this year, at 19th and 20th places. Both
countries achieved high scores in their institutional and
business environments, and display weaknesses with respect
to non-banking financial services. Austria’s 40th ranking
in this pillar is driven heavily by relatively low securiti-
zation activity (46th), while Finland’s performance in
this pillar (35th) is particularly affected by limited IPO
activity (48th).
Italy falls four positions in the rankings to 25th
place this year, although this is accompanied by only a
slight decline in its overall score. Its financial markets,
particularly its bond markets (7th), are an area of relative
strength, while its disadvantages include issues of corpo-
rate governance (53rd), contract enforcement (53rd), and
a relatively high risk of sovereign debt crisis (45th).
Italy’s level of financial access (25th) is fairly consistent
with its overall ranking, although this consistency does
not appear across the access subpillars; the country’s pos-
itive retail access to capital (11th) contrasts greatly with
its very limited commercial access (54th).
The Czech Republic re-establishes itself at the
top of the Eastern European countries covered by the
FDI, achieving 33rd place with a uniform performance
across most of the Index pillars. The Czech banking sys-
tem exhibits a notable degree of efficiency (17th) and
financial information disclosure (19th). Ukraine main-
tains its standing as the lowest-ranked Eastern European
country in the Index, although it does experience a
slight increase in overall score. Opportunities for improve-
ment exist across most aspects of its institutional envi-
ronment (55th) and financial stability (55th). A relatively
high level of securitization activity (12th) emerges as a
benefit.
The Russian Federation maintains its 40th rank
in the FDI, but demonstrates clear advantages in non-
banking financial services, including M&A (9th) and
securitization (4th) activity. The relatively small size of
Russia’s banking system combined with a significant
level of inefficiency continue to pull down the country’s
standing in the banking financial services pillar. Other
areas in need of further development are seen across
much of its institutional environment (53rd) and in
financial access (54th).
ASIA AND THE PACIFIC
Countries in the Asia and Pacific region again show
a high degree of variation across the FDI rankings.
Hong Kong SAR establishes itself as the highest-
ranked economy in this region, achieving an overall
ranking of 3rd in the Index. The economy shows
strengths across its institutional and business environ-
ments (10th and 3rd, respectively), as well as in the sta-
bility of its financial system (2nd). Commercial access to
capital represents another area of advantage where Hong
Kong achieves top standing and bolsters its 2nd-place
ranking in the associated pillar, financial access. While
Hong Kong’s banking system is quite large and efficient,
the extent to which banks disclose financial information
(23rd) could be improved. The economy’s score in non-
banking financial services is negatively affected by lim-
ited securitization activity (30th). In contrast to Hong

Kong’s healthy equity and foreign exchange markets,
bond market development remains relatively undevel-
oped and represents an additional area for improvement.
Singapore follows Hong Kong in the rankings,
maintaining its 4th-place ranking this year. In similar
fashion to Hong Kong, Singapore demonstrates a strong
performance across the pillars pertaining to factors, poli-
cies, and institutions. In particular, the country achieves
top standing with respect to institutional environment,
an achievement mainly driven by effective contract
enforcement (1st) and a sound handling of legal and
regulatory issues (2nd). As is true in Hong Kong, banks
in Singapore are fairly sizeable (11th) and efficiently
operated (1st), but can improve upon the extent to
which they disclose financial information (33rd). Bond
markets (22nd) represent an area for further develop-
ment within Singaporean financial markets. Singapore
has a high level of commercial access to capital (2nd),
while retail access (15th) is more limited.
Australia’s rank falls three positions to 5th place
in the FDI, accompanied by a drop in its overall score.
This decline is driven primarily by worsened perform-
ance in the areas of taxation (20th) and currency sta-
bility (42nd). Specific disadvantages in these two areas
include high marginal tax variation (30th) and a nega-
tive current account balance relative to GDP (49th).
Nonetheless, these weaknesses are countered by the
country’s continued strength in financial intermediation.
Australia achieves solid scores in banking (7th) and non-
banking (8th) financial services. The country’s financial
markets are also quite robust, although a less-developed
bond market serves as one weak spot in this pillar.
Australia’s top performance in retail access to capital
(1st) is accompanied by a fairly high level of commercial
access to capital (11th), enabling Australia to achieve the
greatest level of overall financial access in the Index.
Japan holds on to its 9th-place ranking in the
Index for a second year. The country’s overall perform-
ance is driven primarily by strong results in financial
intermediation. Japan’s banks are sizeable and relatively
efficient, bolstering its 5th place in the banking financial
services pillar. Similar strengths are seen across non-
banking financial services such as M&A activity (4th)
and insurance (2nd). Financial stability represents a dis-
advantage for the country, where a less stable banking
system (39th) and a fairly high risk of a sovereign debt
crisis (28th) pulls down the country’s score in this pillar.
Commercial access to capital continues to not fully reap
the benefits of Japan’s strong financial intermediation, as
shown in the country’s ranking at 36th in this subpillar.
Malaysia (17th) rises an impressive five spots this
year, bolstered by significant increases in its scores within
financial stability (3rd) and non-banking financial ser-
vices (18th). Malaysia’s top standing in currency stability,
accompanied by a fairly stable banking system, serves
as the foundation of a stable financial system (3rd).
Malaysia’s strength as an Islamic banking center remains
1.1: The Financial Development Index 2010
evident in its continued 12th-place ranking in the bank-
ing pillar; a notable level of financial disclosure is a key
contributor to its standing here. Less-developed deriva-
tives and foreign exchange markets are potential areas of
improvement for Malaysia’s financial markets (25th),
although the country’s well-developed equity and bond
markets (15th and 16th) are a source of strength. An
evaluation of financial access in the country presents a
divergent picture at the subpillar level, where robust
commercial access to capital (9th) stands in contrast to
more limited retail access (25th).
In similar fashion to Malaysia, China (22nd) also
sees a notable rise in its standing in the FDI, moving up
by four positions. A limited degree of financial sector
liberalization (43rd) serves as a weakness in China’s
institutional environment, while the country’s business
environment is particularly hampered by relatively poor
infrastructure (47th). A highly stable currency and low
risk of sovereign debt crisis contributes to the stability
of China’s overall financial system (17th), despite a very
poor showing by the country’s banks with respect to
stability (50th). It is worth noting that implicit or
explicit government guarantees are not considered as
part of this measure. China’s non-banking financial serv-
ices also display strength across insurance (5th), IPO
(1st), and M&A (6th) activities; however, securitization
activity (45th) represents one area for further develop- 21
ment. Despite its proximity to China, neighboring
Kazakhstan (49th) displays a differing set of strengths
and weaknesses than China. The country’s institutional
environment (50th) and financial stability (49th) are
weak but a relatively low cost of doing business (16th)
serves as a bright spot in its business environment.
Further, Kazakhstan’s non-banking financial services
are bolstered by considerable IPO and securitization
activities.
Despite a slight increase in score, Korea declines in
the FDI by one position, assuming a ranking of 24th.
The country’s non-banking financial services provide
one clear advantage, driven by a sound insurance sector
(7th) and robust securitization activity (3rd). Korea’s
institutional environment (34th) is impacted by draw-
backs in corporate governance (42nd). In contrast, the
country’s fairly well developed business environment
(19th) is bolstered by the existence of solid infrastruc-
ture (8th). Other key strengths include a healthy pool of
human capital, supported by a high tertiary enrollment
rate (1st) and quality of math and science education
(9th). Nonetheless, these competitive advantages are not
fully reflected in financial access, as commercial access to
capital in the country remains severely constrained
(51st).
Thailand (34th) continues to display consistency in
its performance across most of the Index pillars. This year,
the most salient shortcoming for Thailand’s financial sys-
tem is its weak score in non-banking financial services
(49th), the result of very low levels of securitization
1.1: The Financial Development Index 2010
(54th) and M&A (42nd) activities. The stability of
Thailand’s currency (8th) stands out as one particular
competitive advantage, although this is largely offset by a
less stable banking system (40th) and a fairly high risk of
a sovereign debt crisis (32nd). The size of Thailand’s
banking system (22nd) is partly countered by its lack of
efficiency (34th) and limited disclosure of financial
information (37th), demonstrating two additional areas
in need of improvement for the country. Within finan-
cial markets, the development of its bond markets (19th)
is an additional area of strength.
Despite a slight decrease in overall score, India rises
one position in the Index to 37th place this year. The
country remains strong in non-banking financial ser-
vices (13th), where it demonstrates significant IPO
activity (4th) and a well-developed insurance sector
(8th). Robust derivatives (13th) and foreign exchange
(13th) markets yield India’s relatively sound performance
in financial markets (24th). The country’s institutional
environment (51st) continues to be considerably weak-
ened by a low level of financial sector liberalization
(54th) and also by a poor degree of contract enforce-
ment (52nd). India’s business environment (52nd) is hin-
dered by an acute absence of adequate infrastructure
(56th), a high cost of doing business (52nd), and issues
surrounding the administration of taxes (49th). These
22 areas of difficulty translate into highly constrained finan-
cial access, a difficulty particularly evident in the case of
retail access to capital (43rd).
Vietnam (46th) experiences the reverse of India’s
movement in the Index, falling one place in the rank-
ings despite a slight increase in overall score. The coun-
try’s banking system encompasses some areas of relative
strength, performing fairly well with respect to size
(24th) and efficiency (35th) measures. Commercial
access to capital is a competitive advantage that drives
Vietnam’s 18th position in the overall financial access
pillar.
The Philippines (50th) maintains its ranking in the
Index this year, but demonstrates an improvement in its
scores across most of the FDI pillars. It continues to
benefit from a relatively high degree of currency stabili-
ty. The country has made strides with respect to finan-
cial intermediation, and its performance here is particu-
larly driven by a fairly high degree of M&A (25th) and
securitization (20th) activities, as well as relatively well
developed bond markets (20th). Further improvement is
necessary in order to fully translate these strengths into
broad financial access (50th).
Indonesia (51st), Pakistan (54th), and Bangladesh
(55th) round out the Asian countries in the FDI, all
falling within the bottom 10 countries of the Index. All
three face challenges across much of their respective
business environments, weighing down their perform-
ances in this pillar. Indonesia and Bangladesh fare better
than Pakistan with respect to financial stability, with the
first two countries achieving ranks of 36th and 30th, in
contrast to Pakistan’s 52nd place. This trend in perform-
ance also emerges in measures of financial access, with
Indonesia and Bangladesh both showing broader access
to capital in their financial systems than Pakistan (55th).
Further bright spots in the financial system of Indonesia
are the country’s significantly stable currency (6th) and a
fair degree of IPO (19th) and securitization activities
(28th). Despite Pakistan’s previously mentioned chal-
lenges in financial stability, the country does demon-
strate a relatively stable currency (27th) and banking sys-
tem (23rd). Bangladesh displays notable strength in its
level of retail access to capital (20th), mainly attributable
to the high penetration of microfinance lending in its
financial system.
LATIN AMERICA
At 30th place, Chile achieves the highest score of
any Latin American country in the overall Index, mov-
ing up one spot from its 31st-place ranking last year. It
continues to score very well in the financial stability pil-
lar (7th), which is anchored by a high degree of banking
system stability (2nd). Its solid scores across the institu-
tional (27th) and business (31st) environment pillars rep-
resent consistent scores across corporate governance
(21st), contract enforcement (24th), taxes (27th), and
human capital (26th) indicators. Financial intermedia-
tion remains relatively weak in Chile, particularly in
financial markets (44th) and non-banking financial serv-
ices (37th), where diminished IPO and securitization
activity pull it down. Commercial access to capital is a
notable strength (8th), contrasting with its relatively
poor access to retail financial services.
Brazil moves up in the rankings two spots to reach
32nd place. Financial stability (10th) is a key strength for
Brazil; this is underpinned by robust currency and bank-
ing system stability, but it contrasts with the country’s
relatively higher risk of sovereign debt (42nd). Non-
banking financial services is also an advantage for Brazil,
where it ranks 12th. A high degree of IPO activity is a
key driver of this result, as are, to a lesser extent, healthy
insurance markets and M&A activity. Inefficiency within
Brazil’s banking system pulls down its score here (38th).
Despite Brazil’s financial stability, its institutional envi-
ronment does not perform as well (44th)—this is weak-
ened in particular by legal and regulatory issues such as
its extremely high burden of government regulation
(57th), lack of trust in politicians (52nd), and poor pro-
tection of legal rights (50th). Its business environment
(48th) has a poor showing as well, exhibiting a high cost
of doing business compounded by a burdensome and
distortive tax regime (52nd).
Panama’s rank drops significantly this year, from
29th to 39th place. A fall in the country’s score with
respect to financial access from 17th to 32nd contributes
to this decline, which resulted in particular from lower

retail access to financial services (39th). By contrast,
Panama scores well with respect to commercial access,
coming in at 5th place. Diminished performance in
financial stability is precipitated by weaker scores in
banking system stability (25th) and low scores in capital
adequacy (39th) and the financial strength of banks
(41st). Outside of stability measures, however, Panama
scored quite well in banking financial services (25th), a
result that stems from the size (18th) and efficiency
(27th) of its banks.
Mexico maintains the same rank as last year, 43rd
place, with scores that do not change significantly across
the seven pillars of the Index. Financial stability (15th)
remains a crucial strength, particularly in terms of bank-
ing (12th) and currency (17th) stability. However,
although Mexico’s banking system is stable, it still does
poorly in terms of size (53rd) and efficiency (50th). Its
financial markets performed only marginally better, with
strength in its foreign exchange (23rd) contrasting with
its relatively weaker equity markets (47th). Related to
this, commercial access to capital appears to be a weak
point (52nd) while retail financial access appears strong
(23rd). Legal and regulatory issues and corporate gover-
nance remain major constraints to the development of
Mexico’s institutional environment (48th).
Colombia and Peru come in 47th and 48th in the
rankings, respectively. Like many other Latin American
countries, Peru demonstrates a high degree of financial
stability (20th); Colombia’s performance in this area is
not as high (34th). The low cost of doing business in
Colombia (19th) contributes to a relatively strong busi-
ness environment (36th), and heightened IPO activity
buoys its performance in non-banking financial services
(25th). In most of the other dimensions of the Index—
including financial markets (54th for Colombia and 51st
for Peru), banking financial services (Columbia at 49th
and Peru at 47th), and the ability of companies and con-
sumers to access capital and financial services (Colombia
at 47th and Peru at 44th)—neither Columbia nor Peru
score particularly well.
Argentina and Venezuela round out the Latin
American rankings with 52nd and 56th place, respec-
tively. The legacy of banking system instability and sov-
ereign debt crises continues to weigh heavily on the
stability of Argentina’s financial system (54th). Venezuela
performs better with respect to financial stability (40th),
but its low performance in all other dimensions of the
Index indicate that this may be the result of the lack of
dynamism in its financial system. Non-banking financial
services (25th) is a bright spot for Argentina, stemming
in part from a high degree of securitization activity
(7th). Issues such as corruption, poor protection of
property rights, and inadequate economic policymaking
contribute to poor institutional environments in both
Argentina (52nd) and Venezuela (57th). An inability of
businesses to access various forms of financing contributes
1.1: The Financial Development Index 2010
to both countries taking the two lowest scores in finan-
cial access.
MIDDLE EAST AND NORTH AFRICA
At 21st, the United Arab Emirates scores the
highest of all Middle Eastern and North African coun-
tries in the FDI, falling one notch from the previous
year. Its 6th-place ranking in financial stability is driven
by the stability of its banking system (4th), offsetting its
weaker scores for the risk of sovereign debt crisis (29th)
as manifested particularly in credit default swap spreads
(46th). The institutional (23rd) and business environ-
ments (21st) are advantages, with solid scores across a
number of measures such as legal and regulatory issues
(20th), corporate governance (20th), and infrastructure
(25th). The tax regime (6th) is also especially favorable,
as it poses little administrative burden and has few dis-
tortive effects. The United Arab Emirates has solid
scores in most areas of financial intermediation, though
financial disclosure appears to be a weak point (41st).
Financial access is quite strong for both corporate (10th)
and retail (12th) end-users.
Bahrain comes in at 23rd in the FDI, rising four
places since 2009. Similar to the United Arab Emirates,
its business environment (14th) is a strong advantage, 23
with a highly favorable tax regime (1st) and a low cost
of doing business (10th). An increase in financial stability
(23rd) is a key contributor to its increase in the overall
score, particularly in the areas of banking system stability
(3rd) and risk of sovereign debt crisis (22nd). This con-
trasts a relatively low score for currency stability. In
addition to being stable, its banking system is fairly effi-
cient (14th), though financial disclosure could be better
(36th). Non-banking financial services (38th) and finan-
cial markets (42nd) do not perform as well, which cor-
responds to the difficulty that firms have in obtaining
financing through local equity markets (35). The ability
of firms to access capital through loans (1st), private
credit (12th), and foreign direct investment (11th)
appears to offset this difficulty, resulting in a commercial
access score of 6th place.
The financial system of Saudi Arabia earns it 26th
place in the FDI and demonstrates some similarities to
those of Bahrain and the United Arab Emirates. It is
highly stable (1st) across its banking system (1st) and
currency (5th), with a low risk of sovereign debt crisis
(6th). Similar to its neighbors, it has a healthy business
environment both in terms of its tax regime (5th) and
low cost of doing business (9th). However, it lags in
terms of human capital (33rd) and infrastructure (34th).
Its non-banking financial services (54th) performance is
particularly weak across IPOs, M&A, insurance, and
securitization. Its banks are not particularly large (37th)
and its financial disclosure is relatively weak (43rd).
1.1: The Financial Development Index 2010
Despite these drawbacks, corporate end-users report an
ease of access to nearly all forms of financing.
Israel demonstrates generally solid scores across all
pillars of the Index to earn its ranking of 27th place in
the FDI. Its solid performance in its institutional envi-
ronment (19th) is consistent with similar scores in com-
ponent subpillars, such as corporate governance (25th)
and legal and regulatory issues (19th). Its business envi-
ronment is less strong (33rd), pulled down in particular
by a high cost of doing business. While low levels of
securitization (55th) and M&A activity are a drag on its
non-banking financial services score (31st), commercial
access to financial services remains relatively strong
(21st); the availability of venture capital is a particular
strength (8th).
In contrast to Israel, Kuwait (28th) shows a bit
more variation in performance across the pillars in the
Index. Currency stability and a low risk of sovereign
debt crisis underpin a strong score in financial stability
(18th). The country’s institutional environment is less
favorable (37th), and is compromised by issues such as
fairly weak corporate governance (39th), uncoordinated
economic policymaking (49th), and a lack of domestic
financial sector liberalization (41st). Its equity markets
appear robust (12th), but non-banking financial services
such as insurance (55th) scored near the bottom of the
24 entire Index.
Jordan drops four places in the FDI this year, to
29th place, from the result of lower scores in several pil-
lars. A decline in the relative efficiency of its banks
reduces its banking financial services score to 26th place,
down 11 places from 15th place last year. Its business
environment (43rd) also deteriorates somewhat in areas
such as taxation (33rd) and human capital (40th).
Declining scores in financial intermediation parallel a
significant drop in commercial access (20th). The avail-
ability of data this year for certain variables that were
not included last year—such as life insurance and access
to ATMs—exerted some downward pressure on scores
in these pillars.
The two North African countries covered in the
FDI, Egypt and Morocco, score similarly in the FDI
this year, at 38th and 41st place, respectively. Egypt’s
financial stability advances from 45th place last year to
35th this year, a result driven especially by gains in cur-
rency and banking system stability. This is balanced by
an opposite decline in financial access, from 11th to 21st
place, as firms report increased difficulty in obtaining
loans and private credit. Morocco was added to the FDI
this year. Although its institutional environment is weak
(40th), its financial system is stable at 16th place. Its
financial markets (45th) and non-banking financial serv-
ices (42nd) are not particularly strong, but its banks are
efficient (22nd) and relatively large (26th) in relation to
GDP.
SUB-SAHARAN AFRICA
South Africa is one of two sub-Saharan African
countries covered in the Index. It advances one spot in
the FDI this year, to reach 31st place. The strength of its
insurance sector, particularly life insurance coverage and
density, contributes to the healthy performance of its
non-banking financial services sector (19th). Its banks
(31st) and financial markets (27th) also show solid
scores, an outcome in line with the country’s overall
score. On the strength of its financial intermediation,
commercial access is reported to be good (21st), yet
retail access measures are not as robust (37th). South
Africa’s business environment is also an area of weak-
ness, particularly in areas such as human capital (52nd)
and infrastructure (49th).
The second sub-Saharan African country represent-
ed in the Index, Nigeria, comes in lowest of all coun-
tries, at 57th place. Commercial access to financial
services (31st) is an area of strength for the country,
particularly with its very strong foreign direct invest-
ment (5th). There are also some bright spots in its
institutional environment, notably the openness of its
financial sector (34th) and contract enforcement (39th).
However, corporate governance (52nd) and legal and
regulatory issues (51st) weigh down its performance
here, and its business environment overall is considered
extremely poor (56th). It is worth noting that data avail-
ability issues affect the composition of variables con-
tributing to Nigeria’s financial stability score, a circum-
stance that contributes to its drop in score in this area.
Conclusion
Given the depth of the recent financial crisis, it is
tempting to view financial development in terms of
preventing the harmful effects of financial instability.
However, financial development must be viewed more
broadly in order to identify and address weaknesses
across the broader dimensions of financial systems that
could be the greatest threats to economic growth in the
years ahead; this includes the need to provide long-term
financing for infrastructure development, to improve
local bond markets so that they are a consistent source
of capital for all segments of the economy, and to
improve retail financial access as an enabler of consumer
demand. While acknowledging the importance of finan-
cial development for sustained global economic growth,
we must recognize that improvements must come at
the local level through the rigorous prioritization and
implementation of reforms.
The Country Profiles and Data Tables in this Report
contain a wealth of data that can be a useful starting
point to inform this analysis. These data are presented
within a transparent and comprehensive framework that
encourages breadth of analysis within countries and
the benchmarking of performance across them. The

framework is necessarily limited by the data that are
available for the countries covered in the Index and its
findings should be scrutinized and where appropriate,
challenged. However, we believe the advantages of
bringing together such a comprehensive amount of data
in a structured and accessible way far outweigh these
limitations. We hope that this Report broadens and
sharpens the perspective of those who are working to
harness the full potential of financial systems to promote
global economic growth and individual welfare.
Notes
1 Eichengreen et al. 2009.
2 Rajan 2010.
3 Khan and Senhadji 2000.
4 Schumpeter (1912) held that financial intermediaries select the
firms that utilize an economy’s savings. More formally, his view
stipulated that financial intermediaries tend to adjust the process
of savings allocation rather than alter the savings rate itself. Thus,
Schumpeter’s notion of finance and development focuses on the
effect of financial intermediaries on productivity growth and the
rates of technological change.
5 For a detailed review of the literature on finance and growth, see
Levine 2004.
6 Kannan 2010.
7 Ranciere et al. 2008. This research does not suggest that financial
crises are good for economic growth. Rather, it suggests that the
systemic risk taking that overcomes financial bottlenecks to eco-
nomic growth is associated with occasional financial crises.
8 Michalopoulos et al. 2009
9 Feyen 2009.
10 Levine 2004.
11 La Porta et al. 1997, 1998b, 1999b,; Levine 1998, 1999; and Barth
et al. 1999.
12 Bekaert and Harvey 2005 also held explicitly that reforms that
strengthen a country’s legal environment and investor protection
are most likely the true cause for better growth prospects.
13 Siklos 2010.
14 La Porta et al. 1997; King and Levine 1993.
15 Schleifer and Vishny 1997.
16 Tavares 2002.
17 Galor and Zeira 1993.
18 Fitzgerald 2007.
19 See Grilli and Milesi-Ferretti 1995; Kraay 1998; Rodrik 1998; and
Edison et al. 2002a for findings related to the positive relationship
between liberalization and growth. The works of Quinn 1997; Klein
and Olivei 1999; and Quinn and Toyoda 2008 support the relation-
ship. Research presented in Edison et al. 2002b; Chanda 2003;
and Arteta 2003 found the relationship to be ambiguous.
20 De la Torre et al. 2008.
21 Ito and Chin 2007.
22 Levine 1997.
23 Outreville 1999.
24 Barro 1991.
25 Beck 2006.
26 Loayza and Ranciere 2002.
27 Balakrishnan et al. 2009.
1.1: The Financial Development Index 2010
28 De la Torre et al. 2010.
29 Rojas-Suarez 2003.
30 Goldsmith 1969.
31 Ito and Chinn 2007.
32 Levine 2004.
33 That such channeling and efficient allocation occurs is emphasized
based on two premises: (1) financial intermediaries provide liquidi-
ty, and (2) financial intermediaries are capable of altering the riski-
ness of assets; see Claus and Grimes 2003.
34 Gerschenkron 1962, in addition to others, asserts that banks
finance growth in a more effective and efficient way than market-
based systems, particularly in underdeveloped economies where
non-bank financial intermediaries are generally less sophisticated.
35 Rajan and Zingales 2001.
36 Levine 1997, 2001.
37 Barth et al. 1999.
38 Vittas 1998.
39 Demirgüç-Kunt and Levine 2001.
40 Noyer 2006.
41 Lin 2007.
42 Carmichael and Dissou 2000.
43 Levine and Zervos 1996 employed several indicators for stock
markets spanning size (market capitalization ratio) and liquidity
(stock market turnover and stock market value traded both as
shares of GDP).
44 Arestis et al. 2001.
45 Demirgüç-Kunt and Levine 2001.
25
46 Fink et al. 2003.
47 See http://imf.org/external/np/speeches/2007/082207.htm.
48 Beck et al. 2006.
49 De la Torre et al. 2006.
50 Ayyagari et al. 2007.
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1.1: The Financial Development Index 2010
Appendix A: Structure of the Financial Development Index 2010
This appendix presents the structure of the Financial
Development Index (FDI).
The numbering of the variables matches the num-
bering of the data tables. The number preceding the
period indicates to which pillar the variable belongs
(e.g., variable 1.01 belongs to the first pillar).
The indicators from sources other than the
Executive Opinion Surveyused in the FDI are normal-
ized on a 1-to-7 scale in order to align them with the
Executive Opinion Survey’s results.1 The Technical
Notes and Sources at the end of this Report provide
detailed information on all of these indicators.
In some instances, the interaction among different
variables was also captured, because certain variables can
be considered more beneficial in the presence of others.
For instance, the effect of liberalizing the capital account
and the domestic financial sector has been found in
empirical studies to be mixed, yielding both positive and
negative results. However, the presence of a strong legal
and regulatory environment and a developed bond mar-
ket tends to mitigate the negative effects of the liberal-
ization process. To account for this, the scores of the
capital account liberalization, commitments to WTO
agreement on trade in services within the financial serv-
28
ices sector, and domestic financial sector liberalization
indexes were adjusted. Any economy with standardized
scores above the average for the legal and regulatory
environment and bond market development experi-
enced positive effects as a result of the liberalization
process, while the opposite is true for countries with
scores lower than these averages.2
Weighting and scaling of variables
One of the key design principles of the Index is the
inclusion of the breadth of variables relevant to the
financial development of both emerging and developed
economies. Given the emphasis placed on the compo-
nent parts of the Index as a framework for analysis, we
have taken a very conservative approach to the weight-
ing of variables. We have generally weighted different
components of the Index equally.
In some instances, there was sufficient cause to
assign different weights to the subpillars within the
Index. Within the financial stability pillar, banking sys-
tem stability is weighted more (40 percent) than curren-
cy stability and risk of sovereign debt crisis (30 percent
each). Within the banking financial services pillar there
are three subgroups: the size of the banking system, the
efficiency of the banking system, and the role of finan-
cial information disclosure. The first two variables were
weighted 40 percent each in this pillar, while the last
variable was weighted at 20 percent, thus placing more
importance on the size and efficiency of the banking
system than on the role of disclosure. Within the
financial markets pillar, a 30 percent weight was assigned
to the equity and bond market subpillars, and a 20 per-
cent weight was assigned to the foreign exchange and
derivatives market subpillars. This was done to signify
the relatively greater importance of equity and bond
market development.
For many variables, especially those related to the
size and depth of the financial system, scaling by GDP
was deemed necessary to control for country size.
Scaling by GDP also allows for more relevant cross-
country comparisons.
Index structure
The percentage next to each category in the list below
represents the category’s weight within its immediate
parent category. The computation of the FDI is based
on successive aggregations of scores, from the variable
level (i.e., the lowest level) all the way up to the overall
FDI score (i.e., the highest level), using the weights
reported below. For example, the score a country
achieves on the bond market development subpillar
comprises 30 percent of the country’s financial markets
pillar (VI) score. Likewise, the score a country achieves
in the 5th pillar accounts for 14.29 percent of the FDI
score.
A dynamic weighting regime removes individual
variables from the subpillar and pillar calculations when
no data are present. The weight normally attributed to a
particular variable will be spread among variables for
which data are present. Therefore, the actual weight for
each variable by country may not be exactly as noted.
1st pillar: Institutional environment .................14.29%
A. Financial sector liberalization ......................25.00%
1.01 Capital account liberalization
1.02 Commitments to WTO agreement on trade in
services
1.03 Domestic financial sector liberalization
B. Corporate governance ..................................25.00%
1.04 Extent of incentive-based compensation
1.05 Efficacy of corporate boards
1.06 Reliance on professional management
1.07 Willingness to delegate
1.08 Strength of auditing and reporting standards
1.09 Ethical behavior of firms
1.10 Protection of minority shareholders’ interests
C. Legal and regulatory issues .........................25.00%
1.11 Burden of government regulation
1.12 Centralization of economic policymaking
1.13 Regulation of securities exchanges
1.14 Property rights
1.15 Intellectual property protection
1.16 Diversion of public funds
1.17 Public trust of politicians
1.18 Corruption perceptions index
1.19 Strength of legal rights index
1.20 Central bank transparency
 1.1: The Financial Development Index 2010
Appendix A: Structure of the Financial Development Index 2010 (cont’d.)

D. Contract enforcement...................................25.00% 4th pillar: Banking financial services...............14.29%

1.21 Effectiveness of law-making bodies
A. Size index.......................................................40.00%
1.22 Judicial independence
4.01 Deposit money bank assets to GDP
1.23 Irregular payments in judicial decisions
4.02 Central bank assets to GDP
1.24 Time to enforce a contract
4.03 Financial system deposits to GDP
1.25 Number of procedures to enforce a contract
4.04 M2 to GDP
1.26 Strength of investor protection index
4.05 Private credit to GDP
1.27 Cost of enforcing contracts
4.06 Bank deposits to GDP
4.07 Money market instruments to GDP
2nd pillar: Business environment ......................14.29% B. Efficiency index..............................................40.00%
A. Human capital ...............................................25.00% 4.08 Aggregate profitability indicator
2.01 Quality of management schools 4.09 Bank overhead costs
2.02 Quality of math and science education 4.10 Public ownership of banks
2.03 Extent of staff training 4.11 Bank operating costs to assets
2.04 Local availability of specialized research 4.12 Non-performing bank loans to total loans
and training services C. Financial information disclosure..................20.00%
2.05 Brain drain and ease of hiring foreign labor 4.13 Private credit bureau coverage
2.06 Tertiary enrollment 4.14 Public credit registry coverage
B. Taxes ...............................................................25.00%
2.07 Irregular payments in tax collection
5th pillar: Non-banking financial services ......14.29%
2.08 Distortive effect on competition of taxes
and subsidies on competition A. IPO activity.....................................................25.00%
2.09 Marginal tax variation 5.01 IPO market share
2.10 Time to pay taxes 5.02 IPO proceeds amount
5.03 Share of world IPOs
C. Infrastructure .................................................25.00%
2.11 Quality of overall infrastructure B. M&A activity ..................................................25.00%
2.12 Quality of telephone infrastructure 5.04 M&A market share
5.05 M&A transaction value to GDP 29
2.13 Internet users
2.14 Broadband Internet subscribers 5.06 Share of total number of M&A deals
2.15 Telephone lines C. Insurance ........................................................25.00%
2.16 Mobile telephone subscribers 5.07 Life insurance density
D. Cost of doing business .................................25.00% 5.08 Non-life insurance density
2.17 Cost of starting a business 5.09 Real growth of direct insurance premiums
2.18 Cost of registering property 5.10 Life insurance coverage
2.19 Cost of closing a business 5.11 Non-life insurance coverage
2.20 Time to start a business 5.12 Relative value-added of insurance to GDP
2.21 Time to register property D. Securitization.................................................25.00%
2.22 Time to close a business 5.13 Securitization to GDP
5.14 Share of total number of securitization deals

3rd pillar: Financial stability...............................14.29%

A. Currency stability ..........................................30.00% 6th pillar: Financial markets...............................14.29%
3.01 Change in real effective exchange rate (REER) A. Foreign exchange markets...........................20.00%
3.02 External vulnerability indicator 6.01 Spot foreign exchange turnover
3.03 Current account balance to GDP 6.02 Outright forward foreign exchange turnover
3.04 Dollarization vulnerability indicator 6.03 Foreign exchange swap turnover
3.05 External debt to GDP (developing economies) B. Derivatives markets ......................................20.00%
3.06 Net international investment position to GDP 6.04 Interest rate derivatives turnover: Forward rate
(advanced economies) agreements
B. Banking system stability ..............................40.00% 6.05 Interest rate derivatives turnover: Swaps
3.07 Frequency of banking crises 6.06 Interest rate derivatives turnover: Options
3.08 Financial strengths indicator 6.07 Foreign exchange derivatives turnover: Currency
3.09 Aggregate measure of real estate bubbles swaps
3.10 Financial Stress Index 6.08 Foreign exchange derivatives turnover: Options
3.11 Tier 1 capital ratio C. Equity market development.........................30.00%
3.12 Output loss during banking crises 6.09 Stock market turnover ratio
C. Risk of sovereign debt crisis ........................30.00% 6.10 Stock market capitalization to GDP
3.13 Local currency sovereign rating 6.11 Stock market value traded to GDP
3.14 Foreign currency sovereign rating 6.12 Number of listed companies per 10,000 people
3.15 Aggregate macroprudential indicator
3.16 Manageability of public debt
3.17 Credit default swap spreads (Cont’d.)
1.1: The Financial Development Index 2010

Appendix A: Structure of the Financial Development Index 2010 (cont’d.)

D. Bond market development ..........................30.00%

6.13 Private domestic bond market capitalization to GDP
6.14 Public domestic bond market capitalization to GDP
6.15 Private international bonds to GDP
6.16 Public international bonds to GDP
6.17 Local currency corporate bond issuance to GDP

7th pillar: Financial access.................................14.29%

A. Commercial access .......................................50.00%
7.01 Financial market sophistication
7.02 Venture capital availability
7.03 Ease of access to credit
7.04 Financing through local equity market
7.05 Ease of access to loans
7.06 Foreign direct investment to GDP
B. Retail access ..................................................50.00%
7.07 Market penetration of bank accounts
7.08 Commercial bank branches
7.09 Total number of ATMs
7.10 Total number of point of sale (POS) devices
7.11 Microfinance institution (MFI) borrowers’ penetration
rate

Notes
30 1 See Browne and Geiger 2009. The standard formula for converting
hard data is the following:

(country score – sample minimum)

6 x + 1
(sample maximum – sample minimum)

The sample minimum and sample maximum are, respectively, the

lowest and highest country scores in the sample of countries cov-
ered by the FDI. In some instances, adjustments were made to
account for extreme outliers. For those hard data variables for
which a higher value indicates a worse outcome (e.g., Frequency
of banking crises, Entry restrictions for banks), we rely on a nor-
malization formula that, in addition to converting the series to a
1-to-7 scale, reverses it so that 1 and 7 still corresponds to the
worst and best possible outcomes, respectively:

(country score – sample minimum)

–6 x + 7
(sample maximum – sample minimum)

2 The average score for the legal and regulatory environment was
4.07. The average score for the bond market development was
3.07.

CHAPTER 1.2
Financial Development, Capital
Flows, and Capital Controls
HOWARD DAVIES, London School of Economics
MICHAEL DREXLER, Barclays Capital
1.2: Financial Development, Capital Flows, and Capital Controls
Of globalization’s many features, capital flows are among
the most controversial and least clearly understood. A
great deal of good academic work has gone into the
subject, and yet there is no conclusive agreement on
their universal benefit or harm. This is little consolation
to policymakers and industry practitioners who have to
work with both the beneficial aspects and the potential
dangers of global capital flows. We therefore offer a
practical view here to complement the body of academic
research.
After an overview of capital flows and their poten-
tial benefits and dangers, this chapter is split into two
major parts. The first part discusses development of
local financial markets and suggests measures from the
Financial Development Index that can be helpful in
assessing the vulnerability of a local economy to specu-
lative flows. Although it is by no means an exact science,
this assessment should give policymakers and private
actors suggestions on where to look for potential fault
lines.
The second part of the chapter offers a decision-
making framework that can be used when a local
economy is affected by excessive capital flows to the
unfortunate extent that policymakers see no other
option than to consider capital controls. While we
would not endorse such measures per se, it is clear to
us that in practice there may be circumstances in which 31
they are the least bad option. In such a case, we would
advocate that measures be implemented in a rational
and deliberate way rather than in the haphazard fashion
that has often be seen hitherto.
Overview
Capital flows have long been a debated feature of glob-
alization. According to classic economic theory, they go
hand in hand with efficient resource allocation, flowing
from developed economies (which have a capital sur-
plus) to developing markets (which have a surplus of
investment opportunities). In developing markets, they
enable the financing of projects with a high marginal
return that foster future economic growth, thus benefit-
ting the world economy as a whole as well as the local
economy.
However, it is hard to reconcile this theoretical
picture with economic reality. The private inflows to
emerging and developing economies shown in Figure 1
demonstrate clear evidence of “animal spirits” at
work1—both in 1998–2002 when the dot-com bubble
crowded out emerging-market investments and in
2003–07 when an increasing amount of global surplus
capital was looking for attractive yield.
The picture gets even more complicated when
looking at subsets of the data, as evident in Figure 2,
which depicts only private flows to developing markets
in Asia. The well-studied reversal of private flows during
the Asian crisis is clearly evident. However, even direct
1.2: Financial Development, Capital Flows, and Capital Controls
Figure 1: Historical development of emerging market capital flows
700
600
500
US$ billions
400
300
200
100
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(f)
Net private inflows to emerging and developing economies
Source: IMF World Economic Outlook Database, August 2010.
32
investment, long held up as a steady source of “good”
flows, shows extraordinary growth in the years 2005–08
and then contracts to half its 2008 value one year later.
It is almost certain that this decrease will not have been
caused by a sudden lack of decent investment opportu-
nities in the region.
Research has also found that capital has recently
flowed in the opposite direction from that forecast by
classic theory—that is, capital flows have gone from
emerging economies, such as China and the Middle
East, to developed markets such as the United States. In
the process, the flows have inflated asset bubbles and,
according to some commentators, played a significant
role in the recent financial crisis.2
Finally, the orthodox economic view is further
challenged by the lack of a conclusive causal link
between capital account liberalization and economic
development.3 While many authors agree that an open
capital account affords some benefits (potentially of a
secondary or collateral nature), it is clearly not the
panacea for economic welfare that classic theory would
suggest.
Beyond economic fundamentalism
Setting aside the theoretical debate, it is clear that capital
flows are a feature of a globalized economy, and that
they offer a priori benefits worth preserving. They allow
investors to express an opinion on a global portfolio of
opportunities, and therefore promote price discovery
and the long-term allocation of resources (short-term
animal spirits notwithstanding). The more transactional
financial flows facilitate trade and payments, the more
they enable what has been recently termed the “real
economy” on a global basis. Finally, by way of lending,
they can provide liquidity and financing where needed—
augmenting the work of governments and the multilat-
eral institutions that would otherwise have to carry out
this function alone.
So, accepting that capital flows are an integral part of
the global economic system as we know it, the question
becomes one of how to harness their inherent positives
(as outlined in the previous paragraph) while mitigating
their potential negatives.
While we acknowledge the relevance of global
imbalances and related capital flows to the recent
crisis—particularly their role in creating bubbles in some
developed economies (mostly centered around real
estate)—we consider this to be less pertinent in the con-
text of this Report. By definition, and evidenced by their
scores, those economies do not face a development
challenge that could be disrupted by capital flows. Both
their size and their regulatory framework enable them
to deal with potentially destabilizing bubbles should
they choose to.
The impact of capital flows on developing economies
We are therefore more concerned with the effects that
private capital flows can have on smaller economies that
are still in development. A country with a GDP of less
than US$30–40 billion, such as Cambodia or Latvia,

Figure 2: Historical development of private flows to developing Asia
200
n Direct investment, net
n Other private financial flows
150
100
50
US$ billions
–50
–100
–150
–200
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(f)
Private financial flows to developing Asia
Source: IMF World Economic Outlook Database, August 2010.
could easily be overwhelmed by the concerted actions
of only a few investors. It is this problem that should be
of most concern when thinking about financial devel-
opment, as such action could seriously damage a local
market for years if not decades, causing significant eco-
nomic hardship in the process.
The World Economic Forum has convened the
Global Agenda Council on Global Investment Flows to
discuss this particular issue. Council members represent
the private sector, academia, and the public/not-for-
profit sector.4 While the Council’s work and delibera-
tions over the last two years were instrumental in
creating this chapter, it does not necessarily represent
the opinion of every Council member (or their insti-
tutions).
Capital flows and financial development
It is clear that capital flows can have an enormous
impact on financial development. This section will
explore a framework for how economies can assess vul-
nerabilities to the negative aspects of capital flows.
Rational defenses against imported irrational exuberance
Capital flows that are large with regard to a local econo-
my generally bring three dangers:
• inflation of bubbles (this is generally linked to hard
assets such as property, but also company valuations)
1.2: Financial Development, Capital Flows, and Capital Controls
33
that lead to inefficient allocation of resources or a
lack of economic discipline,
• currency mismatches, and
• maturity or liquidity mismatches.
It is the latter two that cause the most dramatic
dangers. One need look no further than the Asian crisis
of 1997 or, more recently, the experiences of countries
such as Hungary. The “hot” foreign money is welcome
at first, as it comes on cheaper terms than the historical
cost of capital in the local economy.5 Often at this stage,
the potential future traps are either overlooked or
rationalized away (for example, currency risk is ignored
because of a perceived convergence or a “bulletproof ”
peg). Only at a later stage, when flows materially
change, do the dangers come to the fore. At that stage, a
buildup of systemic risk often compounds the issue, and
an implicated banking system might need rescue. This
exacerbates the already-considerable strain on both local
economy and government finance and default becomes
a possibility, with the specter of a significantly higher
cost of funds for a long time to come. Economic devel-
opment, seemingly turbo-charged through the period of
hot money inflows, is now impaired for the long term.
In principle, the remedies against the dangers out-
lined above are not complex, and they are well docu-
mented by both reason and empirical research. These
include:
1.2: Financial Development, Capital Flows, and Capital Controls
Figure 3: Suggested sequence to building resilience against excessive capital flows
Vigilant Strong Well-developed
and competent local investor local credit
regulator base
• deep local asset markets (e.g., equity, real estate)
with appropriate macro-prudential supervision to
mitigate boom-and-bust cycles, particularly where
excessive credit extension is concerned;
• deep local currency markets, both spot and deriva-
tives, to allow for hedging and sterilization of for-
eign currency exposures; and
• well-developed local debt markets, offering depth
across the whole yield curve (to combat excessive
34
buildup of short-term debt). Depth in local curren-
cy bonds is particularly preferable, as it prevents
currency mismatches and also takes lending off
banks’ balance sheets.
Of course, this is a wish list, and many developing
economies will be lucky if they have only one of the
three mitigants in place. There are two major underlying
“off-market” ingredients: strong local investors, who
have the appetite to participate in these markets, there-
by creating depth; and a good regulator who monitors
participants’ use of the markets for hedging rather than
excessive speculation. (According to many credible
accounts, the major fault line that preceded the Asian
crisis was excessive risk appetite in the respective
economies’ private sector, which then overwhelmed
otherwise relatively soundly run sovereigns.)
In summary, it would seem that maturity/liquidity
mismatches are probably the most disastrous for an
economy under a sudden reversal of flows, followed by
currency mismatches (which can bring on inflation/
deflation and seriously cripple an economy). The burst-
ing of asset bubbles is of course also painful, but—as
long as leverage has been kept in check—this will not
affect an economy as endemically as the previous two
issues. Figure 3 summarizes our thinking in graphical
form.
It is interesting that many emerging economies first
try to create strong local equity markets and neglect
credit and currency markets, thereby making themselves
Deep local Other
currency asset
markets markets markets
more vulnerable to the detrimental effects of hot money.
Even worse, they may attract the first wave of specula-
tive money through their highly visible equity markets.
The usual sequence of events for such markets is that
speculative money first drives up the local stock market;
once valuations have become exorbitant, it seeks other
routes to get exposure to the local economy—frequently
through foreign-denominated high-yield debt at short
maturities (as was the case in the Asian crisis). That
debt, in the absence of local bond markets, is channeled
through local banks, which—conveniently for foreign
investors—carry an implicit guarantee because of their
systemic nature in the economy. Systemic risk thus
accumulates, which can ultimately bring down the
whole economy as flows reverse.
When things go smoothly, however, there is some
academic evidence that liberalized equity markets can
add a full percentage point to economic growth.6 We
emphasize, however, that developed non-equity capital
markets would not impede those positive effects but
rather add significant downside protection.
The sequencing described here may not apply in
all circumstances, and a more nuanced view might be
necessary for individual markets, as addressed in the
work of de la Torre and Schmukler,7 among others.
However, until a better alternative is agreed upon, we
propose this sequence as a “base case” that countries can
then adapt on the basis of their unique circumstances.
The strength of the Financial Development Index
outlined in this Report, from this perspective, lies in its
ability to help economies assess their resilience to exces-
sive capital flow episodes. With the exception of the
qualitative assessment of the regulator, all the other four
categories previously explained have associated metrics
in the Index. Table 1 maps them out.
Putting the framework outlined in Figure 3 crudely
into practice, we follow a two-step approach. We aggre-
gate the first three measurable resilience categories into
a combined defensive score,8 and map this against an
economy’s GDP. If the GDP is small (hence the local
economy can easily be overwhelmed by determined
 1.2: Financial Development, Capital Flows, and Capital Controls
Table 1: Financial Development Index metrics mapped against resilience categories

Category Corresponding metrics in the FDI

Strong local investor base 4th pillar: Banking financial services

4.03 Financial system deposits to GDP
4.06 Bank deposits to GDP

7th pillar: Financial access

7.01 Financial market sophistication
7.02 Venture capital availability

Well-developed local credit markets 4th pillar: Banking financial services

4.05 Private credit to GDP

5th pillar: Non-banking financial services (particularly relevant in absence of bond markets)
5.13 Securitization to GDP
5.14 Share of total number of securitization deals

6th pillar: Financial markets

6.13 Private domestic bond market capitalization to GDP
6.14 Public domestic bond market capitalization to GDP

7th pillar: Financial access

7.03 Ease of access to credit (assuming local credit)
7.05 Ease of access to loans (assuming local loans)

Deep local currency markets 6th pillar: Financial markets

6.01 Spot foreign exchange turnover
6.02 Outright forward foreign exchange turnover
6.03 Foreign exchange swap turnover 35
6.07 Foreign exchange derivatives turnover: Currency swaps
6.08 Foreign exchange derivatives turnover: Options

Other asset markets 5th pillar: Non-banking financial services

5.01 IPO market share
5.02 IPO proceeds amount

6th pillar: Financial markets

6.09 Stock market turnover ratio
6.10 Stock market capitalization to GDP
6.11 Stock market value traded to GDP
6.12 Number of listed companies per 10,000 people

7th pillar: Financial access

7.04 Financing through local equity market
1.2: Financial Development, Capital Flows, and Capital Controls

Table 2: Details of the defensive strength indicator speculators) and the defensive score also small, an econ-
omy is at risk from speculative flows. Figure 4 depicts
Defensive Local Local
GDP strength Investor credit currency
the result of this circumstance, with selected economies
2010 FDI data (US$ billion) score base markets markets highlighted.
Bahrain** 20 2.10 4.75 2.50 1.12 The shaded rectangle in the figure depicts the area
Jordan 23 3.19 4.49 3.28 n/a
where we would have cause for concern—countries
Panama** 25 2.83 4.32 2.48 n/a
Slovak Republic* 88 1.30 2.57 1.72 1.02 that are small in GDP, but have relatively weak defenses
Morocco** 91 2.03 3.80 2.68 1.30 against rapid inflows and outflows of capital by way of
Vietnam* 92 1.99 3.05 2.59 1.57 their local markets. Table 2 provides the numerical back-
Bangladesh* 95 1.60 1.98 1.51 n/a
Kazakhstan* 109 1.83 1.56 2.95 1.77
up for this graph, with countries in the shaded rectangle
Kuwait** 111 2.32 3.11 2.32 n/a highlighted according to their relative scores. We have,
Ukraine* 116 1.51 1.94 2.97 1.12 somewhat arbitrarily, drawn a line at US$500 billion
Peru* 127 1.28 1.91 1.89 1.17
Hungary* 129 1.43 2.33 2.34 1.08
GDP, beyond which we consider it less likely for an
Philippines* 161 1.64 2.43 2.39 1.35 economy to be overwhelmed by volatile capital flows.
Romania* 162 1.00 1.60 1.52 1.00 Of course, this somewhat crude measure does not
Chile* 162 1.80 3.24 2.13 1.38
mean that a country is either necessarily about to come
Pakistan** 167 2.03 1.92 1.69 2.41
Nigeria* 173 1.13 1.23 1.00 n/a under speculative pressure or that there are no mitigat-
Singapore 177 4.31 5.69 3.76 3.72 ing factors in its local economy should this happen. A
Egypt** 188 2.43 3.28 2.43 n/a country such as Saudi Arabia is a good case in point—
Malaysia** 191 2.78 5.19 3.98 1.45
Israel* 195 1.95 4.58 1.88 1.18
despite relatively weak defenses as measured by our score,
Czech Republic* 195 1.59 2.94 2.30 1.10 the cash generated by its oil wealth would be likely to
Hong Kong SAR 211 4.27 7.00 2.90 3.47 protect it from the effects of hot money.
Ireland** 228 2.63 4.10 3.90 1.66
Colombia* 229 1.17 1.58 1.86 1.14
Nevertheless, the defensive strength indicator score
United Arab Emirates 230 3.09 4.57 2.93 n/a should spark a constructive debate about some economies’
Finland** 238 2.18 3.64 2.81 1.56 vulnerabilities. It is particularly those economies with a
Thailand** 264 2.28 3.92 2.58 1.68
relatively low strength of local investors (either by way
South Africa* 287 1.95 3.75 2.83 1.15
36 Denmark 309 3.32 3.73 4.54 2.63 of overall population wealth or by way of extreme
Argentina* 310 1.08 1.00 2.14 1.12 wealth concentration) that seem most at the mercy of
Venezuela* 337 1.35 1.33 1.48 n/a foreign capital flows. Currency unions (e.g., the euro in
Saudi Arabia* 370 1.78 3.05 2.21 1.39
Austria** 382 2.51 4.28 2.95 1.77
Slovakia) and other arrangements that are not captured
Norway** 383 2.42 5.65 2.40 1.31 by the FDI variables somewhat mitigate the predictive
Sweden** 405 2.45 3.72 3.57 1.66 score around local currency markets. Again, we are fully
Poland* 430 1.33 2.22 1.71 1.20
Belgium 470 3.23 4.75 4.20 2.23
aware of the shortcomings of the crude methodology
Switzerland 495 4.21 6.52 3.17 3.46 depicted here, and it is not our intention to “name and
Indonesia* 539 1.47 2.47 2.09 1.17 shame” certain economies; rather, we want to stimulate
Turkey* 615 1.75 2.24 2.24 1.65
debate around preparedness for speculative capital flow
Netherlands 795 3.76 5.78 5.49 2.17
Korea, Rep. ** 833 2.32 2.58 3.08 2.09 episodes before they become a matter of urgency.
Mexico* 875 1.24 1.55 2.01 1.20
Australia 997 3.78 5.04 3.88 3.09 Defensive measures and advanced asset markets
Russian Federation* 1,229 1.70 1.51 2.71 1.68
India** 1,236 2.60 3.41 2.76 2.32
As a second step, we look at the relationship between
Canada 1,336 3.93 5.68 4.90 2.70 economies’ defensive measure (the score just discussed)
Spain 1,464 3.26 5.71 4.85 1.66 and their development of more advanced asset markets
Brazil** 1,574 2.06 3.38 3.23 1.31
Italy** 2,118 2.60 2.90 4.23 1.96
(in particular, equities). We compute an advanced markets
United Kingdom 2,184 7.00 6.51 5.29 7.00 score from the variables listed in the last category of
France 2,676 3.77 3.91 4.59 3.25 Table 1, and the results are graphically depicted in
Germany 3,353 3.61 4.81 3.74 2.98
Figure 5.
China** 4,909 2.20 3.62 2.34 1.78
Japan 5,068 4.52 5.99 4.05 3.82 At first glance, the graph shown in Figure 5 con-
United States 14,256 5.36 4.35 7.00 4.65 firms the hypothesis that many emerging economies
Source: The Financial Development Index; authors’ analysis. grow their advanced markets, such as stock exchanges,
Notes: * = countries with a defensive strength score lower than 2.00; before fortifying the more fundamental asset classes of
** = countries with a defensive strength score between 2.00 and 3.00.
Data in blue bold highlight indicator scores lower than 2.00. Because of the credit and foreign exchange. Again, to stimulate debate,
re-normalization of each indicator onto a scale of 1–7, the overall defense
score will not appear as a straight arithmetic mean of its three constituent
we have highlighted those economies where there is a
scores in this table. significantly higher score for advanced market mecha-
nisms than for defensive market ones.9 It may be no
surprise that a considerable number of those economies
have in fact seen their equity markets appreciate signifi-
cantly, and some observers believe that asset bubbles are
 1.2: Financial Development, Capital Flows, and Capital Controls
Figure 4: Defensive strength vs size of economy

7
United Kingdom

United States
Defensive strength score

5
Japan
Singapore Switzerland

Hong Kong SAR Canada

4 France
Australia

Germany
Jordan
3
Malaysia
Ireland
Kuwait
Italy China
Bahrain Brazil
Saudi Arabia
2
Turkey

Mexico Russian Federation

Slovak Republic Poland

1
10 100 1,000 10,000 100,000

GDP (US$ billions, logarithmic scale)

Source: Financial Development Index 2010; authors' analysis.

37

Figure 5: Advanced markets vs defensive strength

Hong Kong SAR

7
China Singapore
United States
6
Australia
Advanced markets score

Switzerland
Brazil
Korea Canada
5
Israel
Finland
Sweden
4 South Africa
Bahrain Norway Germany
Russian Fed.
France
Saudi Arabia
3 Belgium
Colombia Denmark

2
Pakistan
Panama

1 Argentina

1 2 3 4 5 6 7

Defensive strength score

Source: Financial Development Index 2010; authors' analysis.

1.2: Financial Development, Capital Flows, and Capital Controls

Table 3: Details of the advanced markets indicator being inflated in some. To reiterate our previous point,
this is not to say that a damaging capital flow episode will
Defensive Advanced
GDP strength markets follow automatically—but it should increase vigilance
2010 FDI data (US$ billions) score score
in at least some of those economies. The transmission
Bahrain 20 2.10 3.50
mechanism of speculative capital via credit, and often
Jordan 23 3.19 4.11
Panama 25 2.83 1.49 the local banking system as well, deserves special atten-
Slovak Republic 88 1.30 1.57 tion in this regard. In particular, smaller countries such
Morocco 91 2.03 3.03 as Colombia, Israel, or Pakistan with low local credit
Vietnam 92 1.99 2.82
Bangladesh 95 1.60 2.03
market scores and absolute size could be more easily
Kazakhstan 109 1.83 2.68 overwhelmed than, say, Russia or China.
Kuwait 111 2.32 3.76 Table 3 gives further numerical detail on the
Ukraine 116 1.51 1.93
Peru 127 1.28 1.73
graphical scores for all the countries in the FDI. Those
Hungary 129 1.43 1.61 countries that have an advanced market score that is sig-
Philippines 161 1.64 2.27 nificantly (by more than 50 percent) higher than their
Romania 162 1.00 2.25
defensive score are highlighted.
Chile 162 1.80 2.22
Pakistan 167 2.03 2.48
Nigeria 173 1.13 2.07 The potential of trade areas and alliances
Singapore 177 4.31 6.85 Without prejudicing the rich debate around how best to
Egypt 188 2.43 2.37
Malaysia 191 2.78 4.94
develop local financial markets—and fully acknowledging
Israel 195 1.95 4.98 that this will not always be an easy endeavor—we offer
Czech Republic 195 1.59 2.43 some thoughts and analysis on what countries can do to
Hong Kong SAR 211 4.27 7.00
Ireland 228 2.63 2.85
strengthen their financial markets.
Colombia 229 1.17 1.95 Regional trade areas, if enacted credibly, can not
United Arab Emirates 230 3.09 4.61 only boost the local economy but also sensibly pool
Finland 238 2.18 4.80
investor resources and to some extent credit markets. To
Thailand 264 2.28 2.15
South Africa 287 1.95 4.04 illustrate this point, we have taken the original ASEAN 5
38 Denmark 309 3.32 2.70 economies from the list and aggregated their scores in
Argentina 310 1.08 1.00 Table 4.
Venezuela 337 1.35 1.03
Saudi Arabia 370 1.78 3.21
It is noteworthy that, even excluding the outlier top
Austria 382 2.51 2.71 score, pooling provides a significant uplift over the
Norway 383 2.42 4.01 weakest scores on each dimension. Currency market
Sweden 405 2.45 4.42
Poland 430 1.33 2.45
scores are the exception, as might be expected in the
Belgium 470 3.23 2.94 presence of a trade union without a currency union
Switzerland 495 4.21 5.54 (though the variables might understate the effect of
Indonesia 539 1.47 2.78
swap lines agreed to under the Chiang Mai initiative).
Turkey 615 1.75 2.74
Netherlands 795 3.76 5.34 An excellent body of research in the field of capital
Korea, Rep. 833 2.32 4.89 flows and their beneficial as well as detrimental effects is
Mexico 875 1.24 1.47 available, and we point to the references for an overview.
Australia 997 3.78 5.88
Russian Federation 1,229 1.70 3.42
We have omitted many of the good arguments that are
India 1,236 2.60 4.71 ongoing in the academic and public-sector debate, as we
Canada 1,336 3.93 5.13 could not do them justice in the space afforded here. Of
Spain 1,464 3.26 6.14
Brazil 1,574 2.06 5.42
the many recent papers, we would like to highlight the
Italy 2,118 2.60 3.51 work by the BIS (CGFS Paper No. 33) and the chapter
United Kingdom 2,184 7.00 5.63 on liquidity expansion of the recent International
France 2,676 3.77 3.62
Monetary Fund (IMF) Global Financial Stability Report as
Germany 3,353 3.61 3.57
China 4,909 2.20 6.66 highly complementary to our discussion here.
Japan 5,068 4.52 3.90
United States 14,256 5.36 6.49

Source: Financial Development Index 2010; authors' analysis.
Note: Data in blue bold indicate advanced market scores that are 50 percent
greater than defensive strength scores.
A code of conduct for capital controls
There will never be an economic system without irra-
tional episodes, and therefore all the rational defenses
outlined in the previous section might still not prevent
a capital flow episode that proves a threat to systemic
stability of the local economy. Orthodox economic
theory suggests this should never happen—but recently,
 1.2: Financial Development, Capital Flows, and Capital Controls
Table 4: Pooled indicators for the ASEAN 5 economies
Total Local Local Advanced
GDP defensive Investor credit currency markets
2010 FDI data (US$ billion) strength score base markets markets score

Philippines* 161 1.64 2.43 2.39 1.35 2.27

Singapore 177 4.31 5.69 3.76 3.72 6.85
Malaysia** 191 2.78 5.19 3.98 1.45 4.94
Thailand** 264 2.28 3.92 2.58 1.68 2.15
Indonesia* 539 1.47 2.47 2.09 1.17 2.78
ASEAN 5 1,333 2.22 3.57 2.72 1.67 3.45
ASEAN 5 excluding top score 793 2.04 3.50 2.70 1.41 3.04

Source: Financial Development Index 2010; authors' analysis.

Notes: * = countries with a defensive strength score lower than 2.00; ** = countries with a defensive strength score between 2.00 and 3.00. Data in blue bold high-
light scores lower than 2.00.

even the staunchest proponents of that theory have
acknowledged that extraordinary measures of market
intervention might become necessary.10
If it all goes wrong: Capital controls as a last resort
We agree that there can be circumstances where market
intervention is required, and would rather have the ben-
efits of global capital flows with the occasional episode
of market intervention than a regime that consistently
prohibited global flows. But we also would like to
emphasize, as stated in the heading, that we do believe
in such measures of capital control only as a last resort
when all else fails.11 In general, it is our belief that per-
sistent market interventions create inefficiencies that
lead to a worse outcome further down the road.
That said, too often capital controls are instigated
as a knee-jerk reaction in a short time frame when
capital flows become visible and policymakers feel they
need to react quickly. There is consequent variation in
the instruments being used, often incorrect expectations
of what they can achieve, and subsequent changes that
contribute to market confusion. We aim to reduce this
variation by offering some principles and recommenda-
tions for the successful use of capital controls in the
remainder of this chapter.
The scope of this discussion covers capital controls
designed to deal with hot money. It does not cover
regulatory regimes that seek to restrict foreigners’
participation in local markets over the long term (as
in countries such as India or China). These regimes are
normally governed by national policy interests rather
than the need to contain short-term destabilizing
money flows, and are therefore not subject to the same
pressures of quick decision making and potential panic
in local financial markets. Therefore we have excluded
them from the scope of this discussion.
Furthermore, the research does not look at instances
where capital controls were applied toward flows caused
by a political and banking crisis. There exists a compre-
hensive amount of literature on such episodes and we
39
feel we would not be able to add further insight to
these findings.12
To arrive at the conclusions presented in this
chapter, we have created a database of experiences with
capital controls. This database is comprised of nine
episodes targeted at hot money in emerging economies
from 1990 to 2008. In creating this database, we have
used public source data listed in the reference section
and also are grateful to IHS Global Insight for sharing
some of their proprietary data. We have chosen this
timeframe as we feel it holds most relevance for today’s
financial and economic system—analysis of episodes
from the Bretton Woods era would offer limited insights
in our opinion. To arrive at our conclusions, we have
analyzed nine episodes with a total of 156 individual
observations (by which we mean the introduction, with-
drawal, or significant change of a capital control measure).
The analysis confirms that capital controls are not
an easy response to economic imbalances. If adminis-
tered wrongly, they suffer from a variety of problems—
hence the distaste orthodox theory extends toward
them. Some considerations are:
• Capital controls by definition are distortive, and
impede free markets.
• Their long-term efficacy is by no means proven,
and in fact is disputed by a number of reputable
studies.13
1.2: Financial Development, Capital Flows, and Capital Controls
• If they are not implemented correctly, sophisticated
players can circumvent capital controls easily, and
the subsequent environment of frequent adjust-
ments introduces uncertainty about an economy as
a destination of funds. In the extreme, this can lead
to long-lasting reputational damage and reduced
foreign investment into an economy.
These points are, rightly, affirmed in the IMF’s
recent Global Financial Stability Report as well as its pre-
vious publications and stance. We also concur with the
IMF that capital controls do not succeed in addressing
an underlying economic issue (such as an unsustainable
currency peg or a mismatch between monetary and fis-
cal policy).
Depending on the cause of flows, there might be
some adequate alternatives to capital controls. For exam-
ple, it might be possible for regulators and the Financial
Stability Board to work with major prime brokers (who
provide credit to hedge funds) on temporary dynamic
limits for credit extension into “crowded trades.” Such
an effort, in the spirit of constructing a “circuit breaker,”
while of course still interfering with markets, might be
preferable to a full-blown capital control regime in
terms of administrative effort and reputational issues.
40 A suggested decision-making framework for capital
controls
Potentially the most pertinent lesson to be learned from
past episodes is that successful implementations of capi-
tal controls must be considered in the broader context.
So, rather than trying to narrowly penalize a particularly
egregious type of capital flow or investor, it is very
important to start with the goals and available policies
that the capital controls are trying to enhance. This
allows communication of a positive strategy to the mar-
kets and prevents the perception of a retributive regime
that, in the long run, might destabilize the economy
more than short-term capital flows ever would have.
When it comes to preventing instabilities, we are
convinced that those controls that employ market forces
constructively by channeling and signaling are ultimately
more successful than those that purely try to inhibit
markets. First, the financial firepower of markets (as
outlined in the overview to this chapter) can easily
overwhelm local economies. Second, sophisticated
market participants can employ a variety of instruments
to circumvent controls that make no economic sense to
them—and will always do so given enough time.14 So,
although capital controls can act as successful speed
bumps in the short run, it is wise to think about giving
positive incentives to encourage investors where their
money is desired while making it more difficult for
them to place money where it is not desired. The IMF
acknowledges this position in its latest Global Financial
Stability Report by finding market-based controls to be
more transparent and predictable than others, leading to
more positive sentiment, even though the direct imme-
diate efficiency of the controls might be no better or
worse than that of administrative controls.15 Third, and
in accordance with the IMF’s findings, administrative
controls tend to carry a higher operational cost and exe-
cution risk. This is particularly true for those economies
that are not heavily regulated in the first place and that
therefore lack the right talent pools and administrative
structures to enforce controls in the face of highly
sophisticated speculators.
While capital controls can prevent instability in the
short term, the development of other aspects of local
markets will be more effective in the long run. A good
legal and regulatory framework, as well as adequate local
capital markets—particularly bond markets to sterilize
interventions16—can be an important part of an
improvement plan. Timing an improvement plan’s
announcement with the introduction of capital controls
will signal the long-term intent and seriousness of the
economy’s policymakers. Prudential regulation in partic-
ular has been seen as a useful tool in mitigating asset
price inflation and promoting output stability17—this
should be considered before, or in parallel with, reaching
into the capital control toolbox.
Because the effectiveness of capital controls will
diminish over the long run, it is important to keep the
exit strategy in mind from the beginning—and, where
possible, to signal this strategy clearly to the markets.
This approach ensures that the economy imposing
the capital controls is seen as transparent and having a
predictable long-term strategy, which greatly helps in
attracting “good flows” in the future. Figure 6 summa-
rizes our thinking in a graphical fashion.
It should also be pointed out that the iteration
process outlined above is not purely for academic or
planning purposes. Once an economy has successfully
introduced (and exited) capital controls, there remains a
risk that the circumstances that led to their introduction
will recur. Examples in our database are:
• Brazil (1993–97, 2000, 2009)
• Colombia (1993–98, 2007)
• Malaysia (1994, 1997)
• Thailand (1995, 1997, 2006)
This recurrence might reflect an appetite by policy-
makers to revert back to what used to work well as
much as an appetite by arbitrageurs to test the waters on
an economy they have targeted before. Either way, it is
useful for policymakers to consider that they are likely
to re-introduce capital controls at some point in the
future—and to avoid any rhetoric to the contrary that
might undermine their credibility.
 1.2: Financial Development, Capital Flows, and Capital Controls
Figure 6: Best practice process and a checklist for introducing capital controls

Process
Instability Tool Exit
Goals Policies prevention selection Efficacy strategy

• Identify economic • Identify realistic • Prevent instability • Carefully select • Ensure measures • Develop a soft
goals policies to through a strong the right reactions are effective landing
— E.g., quantified achieve goals prudential frame- and tools — Draw on data- — Study exits
annual growth given constraints work — Leverage data- base of capital from capital con-
targets of trilemma and — Sufficient body base of capital controls’ success trols captured in
pre-existing con- of laws controls to under- measures and the database to
ditions — Appropriate stand the best control detail to plan appropriately
— E.g., exchange regulatory bodies tools for a given understand keys for a smooth exit
rate stability and that support long- set of conditions to effectiveness of
Activities

perfect capital term financial a given set of

mobility sustainability controls
— Independent through:
monetary policy —• Monitoring
and perfect capi- —• Disclosure
tal mobility —• Reporting
— Promote a
financial system
where markets’
interest is in line
with economic
stability and
growth

Final y
ly, mo ateg
nitor effe ne str
cts and reiterate to fine-tu
41

Source: Authors’ analysis.

Capital controls can be an effective stop-gap to
implement measures that allow for managing the
economy toward a softer landing than would otherwise
be possible in the presence of destabilizing volatility.
However, behavioral finance implications should not be
overlooked. If used over the longer term, capital controls
not only have diminished effectiveness but also can
undermine investor confidence and result in a higher
cost of capital for the economy for years to come. Thus,
as a general principle, the shorter a capital control
regime is kept in place, the better.
We also echo the IMF’s position that, when con-
sidering capital controls, policymakers should take into
account not just their own economy but also the inter-
play with other linked (geographically or through trade)
economies.18 What makes sense in isolation might have
unintended consequences for related economies, which
in turn can lead to undesirable outcomes for the initiating
economy. Particular attention should be paid to desirable
flows such as FDI or those from trade patterns, and,
where possible, controls should be chosen that minimize
disruption in these areas under realistic scenarios.
The importance of moral suasion and clear com-
munication on any measure is paramount, and devising
a communication strategy that sets out the above points
clearly should be a key step when considering capital
controls. The power of the right narrative ensures that
those speculators who are targeted by the control
understand the determination of the local economy, but
also that providers of desirable inflows feel they are still
welcome. There is no cost associated with getting this
right; on the other hand, there is often considerable cost
when enforcing new legislation related to capital controls.
Of course, the right choice of capital controls is also
very important. The next section will discuss findings on
both tool selection and related efficacy in greater detail.
1.2: Financial Development, Capital Flows, and Capital Controls
Which capital controls for which situation
Analysis of the historical episodes showed that five types
of capital controls were employed most frequently. None
of them was a panacea, and Table 5 lists their major
observed strengths and weaknesses.
The efficacy of a capital control will crucially
depend on the motivation of the speculators it is sup-
posed to deter. Particularly important is an insight into
what drives the observed capital flows. In our database,
we found two fundamentally different root causes for
systemically dangerous amounts of hot money (Table 6).
Other root causes, such as appreciation of a specific asset
class (e.g., city real estate) are rarely of a magnitude that
threatens the whole economy and can be dealt with
within classic regulatory tools such as lending standards.
It should be clear that certain tools lend themselves
more easily to countenance arbitrageurs drawn by a
specific root cause. For example, an unremunerated
reserve requirement (URR) has proven effective when
deployed in an interest rate differential situation, whereas
quantitative limits are more appropriate against currency
depreciation expectations.
The episodes show that it pays not to attempt highly
detailed and targeted capital controls—a broad measure
such as a URR is often more successful than highly
targeted measures that investors find easy to circumvent.
42 Features that make the URR successful in an interest
rate differential situation include:
• the adjustability of the measure (“analogue”
measures generally also allow for easier exit than
“digital” ones);
• the direct reduction of arbitrage payoff to sources
of hot money, implying a degree of rationality that
reduces uncertainty to providers of desired capital
flows; and
• the difficulty in circumventing, assuming there
are no exemptions for certain entities (which
arbitrageurs usually exploit very quickly).
As a counterexample to this, outright prohibitions
often result in an escalating reactive arms race of new
legislation that further exacerbates the situation and
increases uncertainty about policymakers’ ability to stay
in charge. Looking at the Argentinean 2001/2 episode,
some 50 new laws were implemented in a short period.
Despite (or possibly because of) this, the EMBI spread
of Argentina’s sovereign bonds rose in excess of 5,000
basis points over US Treasuries.19
Experience from the database suggests that while
hot money is temporary by its very definition, it will
continue to target the economy until the underlying
incentive to speculate is removed. Specifically, exchange
rate sterilization without addressing the core imbalance
should be cautioned against. Such sterilization is likely
to exacerbate flows and either drain foreign reserves (in
the case of depreciation pressures) or force the central
bank to issue debt at higher rates than the foreign bonds
it purchases (in the case of appreciation pressures).
Cautionary examples of such episodes include:
• the fall of Mexican foreign reserves by 77 percent
(a loss of US$20 billion) in the 12 months leading
to the 1994 peso devaluation, and
• the fall of Malaysian foreign reserves by 37 percent
(a loss of US$ 10 billion) in the 8 months of the
1997 crisis.
This observation is backed by academic research,
which concludes that sterilized intervention increases
the volume of capital flows and tilts the balance toward
short-term instruments (FDI and long-term portfolio
flows are usually not strongly affected by sterilization
efforts).20
Academic studies have found that fiscal discipline
and steady public expenditure during episodes of large
capital inflows can help limit real currency appreciation
and foster better growth outcomes in the aftermath.
Sterilized intervention has been observed to be less
effective, and tightening capital controls does not sig-
nificantly improve the outcome either.21
In a similar vein, measures to limit specific investment
strategies for foreigners are usually quickly circumvented
and not very effective, particularly when the economic
upside (e.g., a combination of a tightly managed exchange
rate and high interest rates) persists. Removing the incen-
tive for speculation needs to be a priority, as capital con-
trols alone will not do this. Proving the point, a study of
controls on international transactions in the domestic
currency and stock market operations found no statisti-
cally significant impact on the interest rate differential.22
Capital controls that impose additional costs on
international asset transactions have been shown to
reduce volatility of exchange rates in the long run,
but increased volatility should be expected in the short
run.23 There are also effects on the real economy in the
form of lower equilibrium output levels, and exports
into developing and transition economies have been
found to be reduced by capital controls.24
Firms with only domestic currency revenues might
also find access to foreign currency debt more difficult
under a capital controls regime, even where such access
is not explicitly in scope of the controls.25 An assessment
of the benefits from capital controls versus the potential
longer-term consequences is therefore important,
particularly if the economy relies on a certain growth
trajectory.
On a final note, depending on the state of the
economy, certain capital controls might not work as
effectively as others. For example, debt and equity
controls to reduce outflows (while not affecting inflows)
 1.2: Financial Development, Capital Flows, and Capital Controls
Table 5: Overview of the most frequently employed capital

Typical Main
Tool manifestation Historic usage Key strength weaknesses
<50% URR on new Columbia 2007 Direct reduction of Requires unilateral
Unremunerated
foreign borrowing Thailand 2006 arbitrage payoff and and tightly enforced
reserve Argentina 2001 puts investor assets at application to be
requirements Malaysia 1994 risk effective
(URR) Brazil 1994
Chile 1991

Minimum stay require- Columbia 2007 Buys time for policy- Only delays capital
Time ments on investments Thailand 2006 makers to close flow and does not
requirement or extending maturity of Argentina 2001 arbitrage opportunity eliminate it
debt Malaysia 1994
Brazil 1994
Chile 1991

Limits on pension fund Columbia 2007 Targets immense Encourages

Quantitative investment allocations Thailand 2006 size of speculative maximization of
limit or limit on non–trade- Argentina 2001 transactions that allowance
related foreign Malaysia 1994 exacerbate
exchange holdings Chile 1991 destabilization

Investment tax on short- Brazil 1994 Directly and narrowly Significantly reduces
Direct tax on term debt for foreign Chile 1991 targets speculative investor confidence
financial investors Argentina 2001 transactions
transactions

Limit sale of domestic Thailand 1997 Causes minimal Encourages

Regulation of currency by domestic Malaysia 1997 distortion in domestic circumvention by
trade between investors to overseas markets diverting capital flow 43
residents and investors into non-prohibited
non-residents investment vehicle

Source: Authors’ analysis.

Table 6: Root causes of systemically dangerous amounts of hot money

Root cause Country Timeframe

INTEREST RATE DIFFERENTIAL

Chile June 1991 – Sep 1998
Combination of tightly managed (pegged) exchange rates and high interest Brazil June 1993 – Jan 1995
rates targeting inflation creates an opportunity for arbitrage. Typically large Malaysia Jan 1994 – Aug 1994
volumes of foreign investment into short-term debt instruments.
Mexico Dec 1994 – Apr 1995
Argentina Mar 2001 – Dec 2002

CURRENCY DEPRECIATION EXPECTATION

Thailand Dec 2006 – Mar 2007
Perception of deteriorating economic fundamentals stirs devaluation Colombia Jan 2007 – July 2008
expectations that create a self-reinforcing loop
Thailand Mar 1997 – Jan 1998
Malaysia Aug 1997 – Feb 1999

Source: Authors’ analysis.

1.2: Financial Development, Capital Flows, and Capital Controls

Figure 7: Best practice process and a checklist for introducing capital controls

Knowledge Dialogue Policymakers

Database Metrics

• List of key contacts to aid
countries considering capital
controls
• Code of practice,
recommendations for
appropriate and effective
use of capital controls
• Advice informed and
supported by the database,
a catalog of capital controls
and their historical uses
• Dialogue with nations • Clients are typically policy-
experiencing hot money makers in emerging market
flows economies
• Discussion informed by • Hot/foreign money is
metrics (e.g., Financial creating instability in
Development Index) domestic economy
• Advice provided by key • Use of capital controls
contacts and informed by is under consideration
code of practice and
database

44 Source: Authors’ analysis.

have been shown to work effectively only in high-
income countries.26
Concluding remarks
We see this work as the starting point of the creation
of a knowledge base that is both factual/generic and in
a form that will enable experts to provide tailored
advice to policymakers. Such a knowledge base should
be administered and maintained by an appropriate
international and impartial institution—we would
suggest the IMF for this purpose, and are particularly
encouraged by its recently revised stance toward capital
controls, which makes such a function more tenable.
The Financial Stability Board, with its responsibility
for monitoring financial system vulnerability, would
be likely to find the output useful. Figure 7 depicts our
conception of such a model.
We would also advocate establishing a regular dia-
logue based on metrics that might signal vulnerability to
suddenly rising capital flows. This could take the form
of “what if ” scenario planning and would ensure that
policymakers can impose capital controls in a measured
and prepared fashion when the need arises. The metrics
outlined earlier in this chapter might provide a good
starting point.
Further work to be done would include boosting
the database of episodes with both more historical
(reaching back to the 1970s) and more recent (e.g.,
Brazil 2009) experiences. It could also prove useful to
look at countries with long-standing capital controls
(e.g., India, China) and examine the dynamic changes
they have made over time to their regimes. Resourced
appropriately, this need not be an overly onerous under-
taking; it could even be undertaken by a modestly bud-
geted research team and should refine and sharpen some
of our conclusions significantly.
We hope that this chapter will be helpful for policy-
makers in emerging economies who feel in danger of
being overwhelmed by large capital flows. It is intended
to be only the beginning of a larger effort to provide a
solid framework for a policy mechanism that will stay
pertinent as globalization continues and the global eco-
nomic and financial system grows ever more connected.
We would rather have the option of imposing occasional
capital controls in certain circumstances than have to
reverse out of global markets with their numerous bene-
fits, particularly for emerging economies.

Notes
1 See http://www.economist.com/research/Economics/
alphabetic.cfm?letter=A#animalspirits for a definition of animal
spirits.
2 See Bernanke 2010.
3 See, e.g., Eichengreen 2001 and BIS 2009, among many.
4 See Appendix A for a list of Council members.
5 By hot money we mean speculative short-term capital flows that
seek high risk-adjusted returns. They are characterized by multiple
short-term investments in large quantities and can be very
volatile.
6 Bekaert et al. 2005.
7 De la Torre and Schmukler 2007.
8 This is done by simply averaging the scores across the variables
mentioned in Figure 4; more sophisticated approaches can of
course be envisaged. As in the overall FDI methodology, a score
of 1 is the lowest, a score of 7 the highest.
9 For our purposes here, significantly higher is higher by 50
percent, a somewhat arbitrarily chosen figure.
10 See Ostry et al. 2010.
11 By capital controls we mean restrictions placed on investors’
freedom to move capital across borders. These controls are imple-
mented by local authorities to benefit the domestic
economy by reducing destabilizing pressures caused by
(perceived) speculative investors.
12 See, for example, Reinhart and Rogoff 2009.
13 See, for example, Berg 2009; Clements and Kamil 2009;
and Edwards 1999.
14 For example, see Cardoso and Goldfajn 1997; IMF 2010a.
15 IMF 2010a.
16 See, for example, Balino et al. 1991 and Annex IV to the IMF’s
1998 International Capital Markets report.
17 N’Diaye 2009.
18 IMF 2010a.
19 JP Morgan Chase, Emerging Bond Index Plus.
20 Montiel and Reinhart 1999.
21 Cardarelli et al. 2009.
22 Tamirisa 2004.
23 Frenkel et al. 2001.
24 Tamirisa 1998.
25 Prati et al 2009.
26 Bincini et al 2009.
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 1.2: Financial Development, Capital Flows, and Capital Controls
Appendix A: Global Agenda Council on Global Investment Flows: List of Members

Howard Davies World Economic Forum Contributors

Director, London School of Economics and Council Manager: Isabella Reuttner
Political Science, United Kingdom Research Analyst: Kieran Gopaul
(Council Chair) Forum Lead: Kevin Steinberg
Laura M. Cha
Deputy Chairman, HSBC, External Research Assistant
Hong Kong SAR Eva Gustavsson, Barclays Capital
(Council Vice-Chair)
Manvinder S. Banga
President, Foods, Home and Personal Care, Unilever,
United Kingdom
Andreas Beroutsos
Partner, Eton Park Capital Management,
United States
Ibrahim S. Dabdoub
Group Chief Executive Officer, National Bank of
Kuwait, Kuwait; Chair, Arab Business Council,
World Economic Forum
Michael Drexler
Managing Director, Global Head of Strategy
Corporate/Investment Banking and Wealth
Management, Barclays plc, United Kingdom
Barry Eichengreen
Professor of Economics and Political Science,
University of California (Berkeley), United States
Asaf Farashuddin
Vice-President, Strategy and Initiatives, 47
IHS, United States
Diana Farrell
Deputy Director, National Economic Council (NEC),
United States
Per-Kristian Foss
Member of Parliament, Norway
Steven J. Gilbert
Chairman, Gilbert Global Equity Partners,
United States
Takatoshi Ito
Professor, Graduate School of Economics and
Public Policy, University of Tokyo, Japan
Gerard Lyons
Chief Economist and Group Head, Global Research,
Standard Chartered, United Kingdom
Robert Pozen
Chairman, MFS Investment Management,
United States
Angela Redish
Professor, Department of Economics,
University of British Columbia, Canada
John J. Studzinski
Senior Managing Director and Global Head,
Corporate Advisory Services, Blackstone Group,
United Kingdom
Levent Veziroglu
Executive Vice-President, Dogus Holding, Turkey
Jacob Wallenberg
Chairman, Investor AB, Sweden
Bernard Yin Yeung, Dean and Stephan Riady
Distinguished Professor, National University of
Singapore, Singapore
 1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
CHAPTER 1.3 Small- and medium-sized enterprises (SMEs) account
for a large share of enterprises as well as a large share of
overall employment in the private sector of most
SME Finance: What Have We economies, a situation that justifies the statement that
“SMEs are the emerging private sector in poor countries
Learned and What Do We Need and thus form the base for private sector–led growth.”1
Cross-country evidence, however, also shows that SMEs
to Learn? are more constrained in their operation and growth than
large enterprises and access to financial services features
THORSTEN BECK, CentER and EBC, Tilburg University, and CEPR.
importantly among the constraints.2
Recently, and partly because of the global economic
crisis, SME finance has gained prominence in policy-
makers’ discussions. The G-20 has established a committee
on SME finance, co-chaired by Germany and South
Africa, and has supported the G20 SME Finance
Challenge, a competition for innovative solutions to
overcome SMEs’ financing constraints.3 Many sugges-
tions for financial sector reforms—including regulatory
reform discussions, often referred to as Basel 3—are tested
for their impact on SMEs.
What have we learned from empirical research over
the past 10 years? What are the policy implications from
this research? And where do researchers still need to
provide answers? What data requirements must be
addressed to answer these questions? This paper summa-
rizes research on SME finance over the past 10 years
and the policy recommendations arising from it, as well 49
as points to open questions and the data that we need to
answer these questions.

SMEs’ role in the economy

Policy efforts targeted at SMEs have often been
justified with arguments that (1) SMEs are an engine of
innovation and growth and (2) they help reduce poverty
because they are labor-intensive and thus stimulate job
growth, but (3) they are constrained by institutional and
market failures.4 Cross-country, country-level, and
microeconomic studies, however, do not support these
claims. One study shows that, although faster-growing
economies have a higher share of SME employment in
their manufacturing sectors, it is not the size of this
segment that drives growth.5
On the other hand, cross-country research has
pointed to the institutional and business environments—
including well-defined property rights, both between
private parties and protection against government
expropriation; effective contract enforcement; competi-
tive product, labor, and capital markets; and a legal
framework that allows for relatively easy entry and
exit of enterprises—as important factors for economic
development. Another study shows that high firm regis-
tration costs hamper new firm creation and growth,
while property right protection and regulations fostering
access to finance are conducive to firm creation and
growth.6 The effect of such policies might also explain
the absence of a robust relationship between the size of
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
Figure 1: Comparison of financing of small, medium, and large enterprises
60
50
Percentage of firms
40
30
20
10
Finance working capital
Source: The World Bank’s Enterprise Surveys and author’s calculations. Averages across firms and countries are from Enterprise Surveys undertaken between
2005 and 2009.
50
the SME sector and economic growth, as a comparison
between Italy and the United Kingdom illustrates. On
the one hand, Italy has high registration costs and many
old, inefficient, and slow-growing SMEs; the United
Kingdom, on the other hand, with low entry barriers,
has firms that enter at a lower scale than they do in Italy
but grow more rapidly.7
The empirical evidence thus points to the entry
of new firms—which are mostly small at entry—and the
possibilities for successful SMEs to grow as decisive. It
is not the size of the SME segment but their dynamism
that helps economic development. Recognizing
dynamism rather than size of the SME sector as the
source of economic development identifies another
important distinction that analysts should make among
the firm population: informal microenterprises, the
establishment of which is often the result of a lack of
alternative economic opportunities, and small formal
enterprises, some of which might have high growth
potential.
Corporate finance: The size gap
Small firms consistently report higher financing obsta-
cles than medium and large enterprises, as do younger
firms.8 The higher financing obstacles reported by
small as compared with large firms are also reflected in
financing patterns (Figure 1). SMEs use significantly less
external funding for both working capital and fixed asset
investment.
n Small
n Medium
n Large
Use fixed asset finance Use loans Cite finance as severe obstacle
Small firms do not only report higher financing
obstacles, they are also more adversely affected by these
obstacles. Using firm-level data across 56 countries,
researchers find that small firms’ financing obstacles have
almost twice the effect on their growth that large firms’
financing obstacles do.9
Quasi-natural experimental evidence confirms
the importance of credit constraints for firm growth.
Analyzing detailed loan information on 253 Indian SMEs
before and after they became eligible for a directed sub-
sidized lending program, a recent study finds that the
additional credit resulted in a proportional increase in
sales rather than a substitution for other non-subsidized
credit, indicating that these firms were credit constrained
before receiving subsidized credit.10 Similarly, another
study finds that small non-listed and non-group firms
in Pakistan reduce their sales after they become ineligible
for subsidized export credit, indicating the existence
of credit constraints; in contrast, large, listed, and group
firms do not reduce their sales after losing access to
subsidized credit.11 Going even further down the size
scale, yet another study uses a randomized experiment in
Sri Lanka to test the productivity of capital by providing
small grants to a group of micro-entrepreneurs and
comparing their returns to a control group. These
researchers find annualized returns of 55 to 63 percent.12
Recent research also shows the importance of the
business environment for firms’ financing constraints
and patterns. One paper demonstrates that institutional
development, measured very broadly, is the most robust
 1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
Figure 2: Access possibilities frontier for credit services

Constrained Optimum Excess

access access access

iiii (fully inclusive)

Interest rate

i* (equilibrium)
II I III

S’ S*

imc (risk free)

B A C 100%

Share of borrowers served

Source: Beck and de la Torre, 2007.

Notes: The access possibilities frontier (APF) is the maximum share of SMEs that can be served in a commercially viable way. i = interest rate; i * =equilibrium
interest rate; imc = risk-free interest rate; see text for descriptions of points I (A), II (B), and III (C); S* = fully efficient APF with maximum profitable outreach;
S’ = inefficient APF caused by regulatory distortions or lack of contestability.

country characteristic predicting cross-country variation
in firms’ financing obstacles, even after controlling for
cross-country differences in GDP per capita.13 The posi-
tive effect of financial and institutional development can
also be observed in the use of external finance. Better
protection of property rights increases external financing
of small firms significantly more than it does for large
firms, particularly because of the differential impact it
has on bank and supplier finance.14 Another study shows
that the effect of obstacles on firm growth is smaller in
countries with better-developed financial and legal
systems,15 while yet another shows that financial develop-
ment exerts a disproportionately large positive effect on
the growth of industries that are naturally composed of
more small firms.16 Financial and institutional develop-
ment helps create a level playing field between small and
large firms, while the lack of an effective financial system
explains the phenomenon of “the missing middle”
observed in many developing countries.
The constraining effect of financial and institu-
tional underdevelopment also shows up in a distorted
size distribution. Research indicates that, in a cross-
country sample, large firms—that is, firms that are most
likely to be able to choose the boundaries of the firm—
are larger in countries with better-developed financial
and legal systems;17 another study finds that, for a sample
of European countries, financial development enhances
new firm entry in sectors that depend more heavily on
external finance and that the smallest size firms benefit
the most in terms of higher entry from higher financial
51
development.18 On the other hand, access to financial
services can help new entrepreneurs survive beyond the
first year, as evidence from Bosnia shows,19 and can help
enterprises innovate at a faster rate.20
The access possibilities frontier is introduced here as
an approach to understanding the size gap in corporate
finance as well as a platform on which to discuss both
bank-level and government-level responses that attempt
to close this gap.21 Transaction costs and information
asymmetries drive the variation in access to finance
across firms of different sizes. Fixed transaction costs in
credit assessment, processing, and monitoring result in
a decrease of unit costs as the size of the loan increases,
which makes lending to SMEs more costly. In addition
to transaction costs, SME lending, more than other
lending product, is affected by the inability to manage
risks. Compared with large firms, SMEs are commonly
more opaque, less likely to be able to post collateral,
and often do not have audited financial statements that
allow a better picture of the enterprise and its projected
profits.
Both lending techniques and government policies
affect the extent to which transactions costs and risk
reduce SMEs’ access to external funding. We define as
the access possibilities frontier the maximum share of
SMEs that can be served by financial institutions in a
commercially viable way (see Figure 2, Point I). This
concept implies that, in many economies, a large share
of microenterprises and even small formal firms might
not be bankable from a commercial viewpoint. This
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
Figure 3: Identifying credit constraints
Do you have a loan?
Have you applied for a loan?
Why have you not applied for a loan?
No need for a loan—establishment has sufficient capital
Interest rates are not favorable
Application procedures for loans or lines of credit are complex
Collateral requirements are too high
Did not think it would be approved
Other reason
Source: The World Bank’s Enterprise Surveys and author’s calculations. Numbers reflect averages across all Enterprise Surveys between 2005 and 2009.
52
frontier—and thus the share of bankable SMEs (Point I, A)
—is determined by technology as well as the institutional
framework within which financial institutions operate.
However, a financial system can very well operate either
below or above this frontier, as we will discuss.
We can use the access possibilities frontier to identify
several types of access to credit problems. A first type
of access problem is demand-originated. This problem
may be evident in too low a number of loan applicants
simply because of self-exclusion resulting from cultural
barriers or financial illiteracy. Alternatively, there may be
a lack of profitable investment projects in the economy
that deserve financing based on their expected return. A
second type of access problem can arise from regulatory
distortions or insufficient contestability that cause lenders
not to fully exploit all the outreach opportunities and
thus settle at a point below the access possibilities fron-
tier (Figure 2, Point II, B). A third and very different
access problem is associated with “excess access,” that
is, an equilibrium above the access possibilities frontier
with loans being granted to a larger share of loan
applicants than is prudently warranted, given the lend-
ing interest rate and the institutional framework (Figure
2, Point III, C). A final access problem consists of too
low a prudent access possibilities frontier, caused by
deficiencies in an economy’s institutional framework
compared with that of countries with similar levels of
economic development.
Each of these types of access problems calls for
different policies. The first—demand-originated
Yes No
41.3% 58.7%
Yes No
12.8% 87.2%
55.70%
14.70%
11.20%
07.20%
05.40%
05.90%
problems—calls for demand-side measures that educate
and encourage the healthy use of financial products by
SMEs. The problem of a lack of profitable investment
projects, on the other hand, has to be addressed through
non–financial sector policies and is primarily not a
problem of access to finance. The second problem calls
for interventions and policies that encourage financial
institutions to maximize outreach to SMEs within the
existing contractual and macroeconomic environment.
Conversely, restraining measures may be called for when
loans are being provided to numbers of applicants
beyond which can be considered prudent. The final type
of problem, too low a prudent access frontier, requires a
set of policies that provide for general reforms of the
business environment and institutional framework that
are not specific to the SME lending market. However, as
we will discuss in the next section, the business model
and lending techniques available to financial institutions
also have a critical impact on the frontier.
A mix of macro-level indicators of the business
environment and Enterprise Survey data can give us an
indication of the possibilities frontier (bankable SME
population), actual banked SME population, and the
reasons for the gap.22 Figure 3 summarizes Enterprise
Survey data and shows that a large share of enterprises
without access to credit have not applied for credit,
and that they have a wide variation of reasons for not
doing so—ranging from lack of demand to cumbersome
application procedures and lack of assets that can serve
as collateral. We note, however, that high interest rates

are also an important reason, which could either point
to the lack of viable investment projects or macro-
economic instability leading to high rates. Such infor-
mation, together with aggregate macroeconomic and
business environment, can be used to specify more
specifically the frontier and the bottlenecks to reaching
and expanding the frontier.23
Business models
The traditional view of SME finance focuses on
relationship lending.24 Longstanding relationships
between a financial institution, or even a specific loan
officer, and the borrower allow problems of information
asymmetry and thus risk to be overcome. Relationship-
based lending, however, might be more costly, moving
the equilibrium away from the possibilities frontier
discussed earlier. Recently the more nuanced view has
been put forward that large and foreign banks, relative
to other institutions, can have a comparative advantage
at financing SMEs through arms-length lending tech-
nologies, such as asset-based lending, factoring, leasing,
fixed-asset lending, credit scoring, and centralized
organizational structures.25
The debate on relationship- vs. transaction-based
lending techniques also has implications for which
institutions can cater cost-effectively to SMEs.
Relationship lending might be better done by small,
community-based financial institutions, while transaction-
based lending is more cost-effectively done by large
financial institutions that can exploit the necessary
economies of scale that investment in technology
implies. In many developing countries, this debate has
an additional dimension, because smaller banks are often
owned by domestic shareholders, while large financial
institutions are often foreign-owned.
Using data for 91 banks across 45 countries,
researchers find that foreign banks are more likely
than domestic banks to use transaction-based lending
techniques and more centralized business models.26
However, they also show that foreign banks do not tend
to lend less to SMEs than other banks. It thus seems
that both relationship- and transaction-based lending
techniques are appropriate for SME lending, and that
both domestic and foreign-owned banks can cater to
SMEs.27
There are also specific transaction-based lending
techniques that seem especially conducive for expanding
SMEs’ access to external finance. Leasing is an attractive
financing tool for SMEs—from the perspective of
both demand and supply—because it is based on the
cash flow of the financed asset, such as machinery or
vehicle, rather than the reputation or the asset base of
the enterprise. It also often includes tax advantages, and
it allows for easier recovery if the correct legal frame-
work is in place. Factoring, the discounting of accounts
receivables, is attractive for small suppliers of large
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
credit-worthy buyers because it does not rely on infor-
mation about the borrower, but rather on the obligor.28
Both leasing and factoring rely on a legal framework
to govern the transactions but rely to a lesser extent on
the contractual framework of a country. Thus these
techniques can help push a financial system toward the
frontier of SME lending, even if this frontier is low.
Equity finance has not been stressed sufficiently as
a source of financing for SMEs. This form of finance
can be a beneficial source of funding in the early stages
of an SME, when debt finance is not an option or the
enterprise has reached its leverage limit. Although some
developed and emerging markets have established second-
tier SME stock exchanges, most developing countries
lack the necessary scale, demand, and infrastructure to
do so. Venture capitalists, including angel financiers, and
private equity funds can be helpful in this context.
Policies
The access possibilities frontier derived earlier allows us
to discuss different policies to alleviate SMEs’ financing
constraints and define government’s role. Specifically, we
will distinguish among market-developing policies that
will help push out the frontier, market-enabling policies
that push incumbent and new financial institutions
toward the existing frontier, and market-harnessing 53
policies that prevent the financial system from moving
beyond the frontier toward a point of financial fragility.
Market developing policies aim at pushing out the
frontier and include reforms in the contractual and
informational frameworks and macroeconomic perform-
ance. While these reforms are not specific to the SME
lending market, they will help level the playing field
between small and large enterprises. Among the reform
priorities in this category, credit bureau and legal system
reforms feature prominently. The appropriate policies in
this case would span a wide range: from titling land prop-
erty to upgrading laws that affect collateral repossession
or execution of guarantees; from modernizing corporate
reorganization and bankruptcy proceedings to improving
the functioning of the judiciary; and from raising
accounting and disclosure standards to establishing the
appropriate legal framework and right incentives for
the development of credit registries, be they private or
public. A growing literature has shown the importance
of credit registries for small firms’ access to external
finance.29
Institutional reforms (even credit registries) can
take a long time to materialize. To the extent that a
financial system is operating below the possibilities
frontier, there is room for market-enabling policies that
may foster the broadening of access even in the absence
of perceptible changes in the institutional framework.
Where the lack of profitable, credit-deserving investment
projects is the main problem, non–financial sector
policies are called for. Where the main reason for being
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
below the possibilities frontier is the demand problem of
self-exclusion, the appropriate policies would emphasize
raising financial literacy. If the main problems lie in sub-
optimization of the credit supply, by contrast, a wider
range of policy options can be considered, starting with
competition policy that allows the entry of new players—
be they banks or non-bank financial institutions—into
the market. Regulatory policies can also be important
to push the system toward the frontier of SME lending,
including regulatory frameworks that enable leasing
and factoring. Loan classification and provisioning rules
can also affect SMEs’ access to finance, through reliance
less on collateral than on forward-looking assessment of
payment performance.
Beyond targeting competition per se, governments
can also try to encourage movement toward the pos-
sibilities frontier by addressing hindrances such as
coordination failures, first mover disincentives, and
obstacles to risk distribution and sharing. Although not
easy to define in general terms because of their wide
variety, these government interventions tend to share
a common feature in creating incentives for private
lenders and investors to step in, without unduly shift-
ing risks and costs to the government.30 Among such
policies are partial credit guarantees.31 Although they
also exist on a private basis, governments and donors
54 have been aggressively pushing to establish partial credit
guarantees to overcome the limited access to bank
credit faced by SMEs. By providing a partial guarantee,
such a scheme can help overcome the lack of collateral
of most SMEs, but issues of appropriate pricing, fund-
ing, and institutional structure are important. Although
such schemes could be run on a self-sustainable basis,
they often involve significant subsidies and contingent
fiscal liabilities to cover losses. While it is difficult to
compute such costs ex ante, it is even more difficult to
measure the benefits, which would be partially captured
by additionality—that is, the share of borrowers that
would not have gained access to finance if it were not
for the partial credit guarantee. There are only a few
rigorous impact assessments of such schemes, but such
evaluations are urgently needed given the popularity
of this policy tool.32
Although the government often does not intervene
directly in the market in the case of most PCG schemes—
if credit assessment and monitoring remains with the
banks—the past 40 years have seen many examples of
market-substituting policies to foster SME lending, with
the balance of results tipping heavily into the negative.
Such policies include directed credit, often combined
with interest rate subsidies, and the establishment of
development finance institutions focused on SME lend-
ing. These policies share the problems of all government-
managed financial sector programs—the trade-off
between commercial and social goals results in high losses
and the non-sustainability of many of these programs.
Undercutting market conditions results in crowding out
private providers, even where the latter would be will-
ing to enter because of changes in the general business
environment or because of technological advances.
Political subversion of these programs often leads to
corruption and the channeling of funds to political
cronies or to specific electoral groups.33
A final group of policies, which we define as market-
harnessing, tries to prevent the financial system from
moving to an unsustainable equilibrium beyond the
frontier through imprudent lending. Such imprudent
lending binges can arise from the same competition
that market-enabling policies try to foster if they are
not accompanied by a properly defined regulatory
and supervisory framework. Market-harnessing policies
therefore aim at keeping banks’ incentives to take
aggressive risks in check through a mix of measures aimed
at strengthening market and supervisory discipline.
Policymakers have to strike a fine balance between
market-enabling policies that push financial institutions
toward the frontier and market-harnessing policies that
prevent them from moving beyond the frontier, with
the balance varying from country to country.
Conclusions
This paper has discussed the results of research over the
past 10 years in the area of SME finance. Although we
have learned a lot thus far, there is still a lot more to
be learned. First, more data are needed, both on the
importance of SMEs in the real economy and on their
financing. The Enterprise Surveys have provided enor-
mous opportunities for analysts and researchers, but
still lack information—such as more detailed financing
information—on many aspects of firms’ financial lives.
Panel samples, where firms are revisited at regular
intervals—as is the case in the Business Environment
and Enterprise Performance Surveys (BEEPS) for former
transition economies—would be good for a larger and
broader sample of countries to test for the effect of
policy reforms or changes in financial market structure
over time. Surveys of informal enterprises and their
constraints can provide additional important insights.
Databases on entrepreneurs,34 along with surveys of
potential and actual entrepreneurs,35 can provide impor-
tant insight into the demand side of SME finance. In
addition, impact evaluation of specific private interven-
tions, as well as business models and government policies
and interventions—such as partial credit guarantee
schemes, for example—are urgently called for. The
microfinance industry has benefitted substantially from
the impact assessments that started some 10 years ago,
and a similar undertaking might be very useful for the
area of SME finance.
In terms of policy recommendations, we have
learned not only about the power of financial sector
reform in fostering SME access to external finance,
but also about the role of specific interventions, such as

credit registries. However, one size does not fit all. The
concept of the access possibilities frontier described
above allows a more rigorous analysis of bottlenecks for
SME finance in a specific country. This has to take into
account that the population of SMEs differs significantly
across countries, ranging from large number of micro-
enterprises in many African countries to more formal
small businesses in East Asia.
A final caveat: while stressing the importance of
SME finance, one should not overlook other growth
constraints SMEs face that can make any alleviation
of financing constraints useless. Finally, although SME
constraints are an important growth constraint, the net
benefit of any government intervention in this area
should be compared with the net benefit of inter-
ventions in other areas, such as health or education.
Notes
1 Ayyagari et al. 2007; Hallberg 2000.
2 Ayyagari et al. 2008.
3 http://www.changemakers.com/en-us/SME-Finance.
4 See Biggs 2002 for an overview.
5 Beck et al. 2005a.
6 Klapper et al. 2006.
7 Other studies confirm these findings. Fisman and Sarria-Allende
(2010) document how entry restrictions distort industrial competi-
tion, while Ciccone and Papaioannou (2007) show that countries
with lower entry regulations see more entry in industries that are
subject to expanding global demand and technology shifts. Using
variation in the implementation of a business registration reform
across Mexican municipalities, Bruhn (2008) finds a significant
increase in registered enterprises as result of lower registration
requirements and the introduction of a one-stop registration
process.
8 Beck et al. 2006a; see also Figure 1.
9 Beck et al. 2005b.
10 Banerjee and Duflo 2004.
11 Zia 2008.
12 De Mel et al. 2008.
13 Beck et al. 2006a.
14 Beck et al. 2005b and 2006b.
15 Beck et al. 2005b.
16 Beck et al. 2008a.
17 Beck et al. 2006b.
18 Aghion et al. 2007.
19 Demirgüç-Kunt et al. 2007.
20 Ayyagari et al. 2010.
21 Beck and de la Torre 2007.
22 The World Bank’s Enterprise Surveys collect information about the
business environment, how it is perceived by individual firms,
how it changes over time, and about the various constraints to
firm performance and growth. The full data are available to
researchers and include all questions from the surveys at the firm
level. See https://www.enterprisesurveys.org/Portal/Login.aspx?
ReturnUrl=/Portal/elibrary.aspx%3flibid%3d14&libid=14.
23 See Brown et al. 2011 for such an analysis specifically for Central
and Eastern Europe.
24 Berger and Udell 1998.
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
25 See Berger and Udell 2006 and de la Torre et al. 2010.
26 Beck et al. 2010a.
27 This is consistent with evidence from the transition economies,
where foreign banks went quickly down-market after their entry
de Haas and Naaborg 2005.
28 Klapper 2006.
29 See, among others, Brown et al. 2009.
30 De la Torre et al. 2006.
31 See Beck et al. 2010b for an overview.
32 See Lelarge et al. 2010 for an assessment of the French credit
guarantee scheme.
33 Cole 2009; Dinc 2005; and Khwaja and Mian 2005.
34 Klapper et al., 2010.
35 Djankov et al., 2006.
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56 De Mel, S., D. McKenzie, and C. Woodruff. 2008. “Returns to Capital

in Microenterprises: Evidence from a Field Experiment.” Quarterly
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Demirgüç-Kunt, A., L. Klapper, and G. Panos. 2007. “The Origins of Self-

Employment.” World Bank Research Department mimeo.

Dinç, I. S. 2005. “Politicians and Banks: Political Influences on

Government-Owned Banks in Emerging Countries.” Journal of
Financial Economics 77 (2): 453–79.

Djankov, S., Y. Qian, G. Roland, and E. Zhuravskya. 2006.

“Entrepreneurship in China and Russia Compared.” Journal of
the European Economic Association 4 (2–3): 352–65.

Fisman, R. and V. Saria-Allende. 2010. “Regulation of Entry and the

Distortion of Industrial Organization.” Journal of Applied
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Hallberg, K. 2000. “A Market-Oriented Strategy for Small and Medium-

Scale Enterprises.” IFC Discussion Paper No. 48. Washington, DC:
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Bureau of Economic Research.
Part 2
Country/Economy Profiles
 How to Read the Country/Economy Profiles
How to Read the Country/Economy Profiles

The Profiles section presents a four-page profile for

each of the 57 economies covered by The Financial Argentina
Development Report 2010. Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................40.1 18.3%
US$ bn
GDP (US$ billions), 2009 .........................................................310.1 Public debt securities .......159.7
GDP (current prices) per capita, 2009 ..............................7,725.7 Private debt securities........16.9
GDP (PPP) as share (%) of world total, 2009 ........................0.81 55.8% Banking deposits .................57.1
20.0% Equity securities ..................52.3
Compound annual growth rate of real GDP (%), 2005–09 ..4.88
Total 286.0
5.9%

Page 1 Total/GDP 87.0%

Financial Development Index 2010

Key indicators 2010 Index......................................................52 2.8

Rank (out of 57) Score (1–7 scale)

1 2 3 4 5 6 7

The first section of each Country/Economy Profile 1st pillar: Institutional environment .........................................52
Factors, policies, and institutions

3.2
INPUTS

Financial sector liberalization ....................................................49 2.7

presents a selection of key indicators: Corporate governance.................................................................48

Legal and regulatory issues .......................................................56
Contract enforcement..................................................................43
3.8
2.6
3.7
2nd pillar: Business environment .............................................42 4.0
Human capital ...............................................................................27 4.4
Taxes...............................................................................................53 3.4
Infrastructure ................................................................................35 3.7
Cost of doing business ................................................................44 4.5

• Population, GDP, and related data come from the
3rd pillar: Financial stability......................................................54
Currency stability..........................................................................31
3.2
3.9
Banking system stability..............................................................53 3.3

International Monetary Fund’s World Economic Risk of sovereign debt crisis ......................................................54 2.5
1 2 3 4 5 6 7

Financial intermediation

Outlook of April 2010. 4th pillar: Banking financial services......................................43

Size index.......................................................................................46
2.9
1.4
Efficiency index.............................................................................54 3.1
Financial information disclosure..................................................2 5.7
5th pillar: Non-banking financial services .............................25 2.5
IPO activity.....................................................................................41 1.4
M&A activity..................................................................................50 1.2

Financial assets by major type, 2008 Insurance .......................................................................................30

Securitization...................................................................................7
6th pillar: Financial markets......................................................53
2.7
4.6
1.4
Foreign exchange markets .........................................................44 1.0
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................53 1.2
Bond market development..........................................................39 1.9

• Public debt figures are from the Economist

1 2 3 4 5 6 7

Financial access 59
Intelligence Unit’s CountryData Database, as 7th pillar: Financial access........................................................56
Commercial access......................................................................56
Retail access.................................................................................40
2.2
2.4
2.0
1 2 3 4 5 6 7

accessed in August 2010. Private debt data come OUTPUTS

N For further details and explanation, please refer to “How Read the Country/Economy Profiles.”

from the Bank of International Settlements

Quarterly Review, June 2010, and are presented
as of 2009. Data on bank deposits are from the
IMF International Financial Statistics database,
electronic version, accessed September 2010 or
the June 2009 PDF version. Equity securities data
were downloaded from the market capitalization
dataset on the World Bank’s World Development
Indicators database in September 2010.
• The four financial asset indicators (public and
private debt securities, banking deposits, and equity
securities) are added to measure total financial assets
in the Index economies. The share of depth attrib-
utable to each component is displayed in the pie
chart. Percentages displayed may not add to 100
percent because of rounding. Private debt data
were not available for Bangladesh, Jordan, Morocco,
or Romania.
• The total financial assets data are shown as a
percentage of GDP, using the GDP figure from
the Key indicators section.
Financial Development Index
This section details the economy’s performance on
the various components of the Financial Development
Index (FDI). At the top is the country’s overall rank
out of 57 economies, its score on the 1-to-7 scale, and
a graphical representation of the score.
Below, the seven pillars of the Index are organized
thematically. The three themes—factors, policies, and
institutions; financial intermediation; and financial
access—are displayed according to their role in the
continuum of the financial system from inputs to outputs.
After the pillar or subpillar name, the first column
shows each economy’s rank for that pillar or subpillar
among the 57 economies included in the Index. The sec-
ond column presents the score for that pillar or subpillar
on the 1-to-7 normalized scale. On the right, the nor-
malized score is represented graphically. For more infor-
mation on the methodology and results of the FDI,
please refer to Chapter 1.1 of this Report.

• The pie chart shows the share of total financial

assets attributable to each of the four types of
financial asset indicators in a given economy.
How to Read the Country/Economy Profiles

Pages 2–4
The Financial Development Index in detail Argentina
Financial Development Index in detail Development Advantage Development Disadvantage

These pages present the rank achieved by a country on INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

each of the indicators entering the composition of the 1.01

1.02
Financial sector liberalization
Capital account liberalization .................................................48 ..... ...............–0.8
Commitments to WTO agreement on trade in services.......40 ..... ...............43.5
Multiple (26) ..........................2.5
Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................37 ..... .................1.0 Multiple (35)...........................1.0

FDI. Indicators are organized by pillar. Please refer to 1.04

Corporate governance
Extent of incentive-based compensation ..............................39 ..... .................4.1 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................48 ..... .................4.2 Sweden .................................5.9

Appendix A of Chapter 1.1 for a detailed structure of 1.06

1.07
1.08
Reliance on professional management .................................37 .....
Willingness to delegate.........................................................38 .....
Strength of auditing and reporting standards .......................55 .....
.................4.5
.................3.7
.................3.8
Sweden .................................6.5
Sweden .................................6.5
South Africa...........................6.4
1.09 Ethical behavior of firms........................................................52 ..... .................3.3 Sweden .................................6.8

the FDI. 1.10

1.11
Protection of minority shareholders’ interests ......................52 .....

Legal and regulatory issues

Burden of government regulation .........................................49 .....
.................3.5

.................2.6
Sweden .................................6.0

Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................56 ..... .................1.7 Switzerland ............................5.6

Next to the rank, a colored square indicates whether 1.13

1.14
1.15
Regulation of securities exchanges.......................................51 .....
Property rights.......................................................................55 .....
Intellectual property protection .............................................56 .....
.................3.6
.................2.7
.................2.5
South Africa...........................6.0
Switzerland ............................6.4
Sweden .................................6.2
1.16 Diversion of public funds.......................................................55 ..... .................2.1 Sweden .................................6.5

the indicator constitutes an advantage (blue square) or a 1.17

1.18
1.19
Public trust of politicians .......................................................56 .....
Corruption perceptions index ................................................46 .....
Strength of legal rights index ................................................40 .....
.................1.5
.................2.9
.................4.0
Singapore ..............................6.4
Denmark................................9.3
Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................29 ..... .................7.5 Sweden ...............................15.0

disadvantage (black square) for the country. 1.21

Contract enforcement
Effectiveness of law-making bodies ......................................53 ..... .................2.2 Singapore ..............................6.5
1.22 Judicial independence ...........................................................54 ..... .................2.6 Sweden .................................6.6

In order to identify variables as advantages or dis- 1.23

1.24
1.25
Irregular payments in judicial decisions.................................49 .....
Time to enforce a contract ....................................................40 .....
Number of procedures to enforce a contract .......................34 .....
.................3.1
.............590.0
...............36.0
Sweden .................................6.8
Singapore...........................150.0
Ireland..................................20.0
1.26 Strength of investor protection index....................................44 ..... .................4.7 Singapore ..............................9.3

advantages, the following rules were applied: 1.27 Cost of enforcing contracts ...................................................12 ..... ...............16.5 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................13 ..... .................5.3 Switzerland ............................6.1
2.02 Quality of math and science education.................................46 ..... .................3.2 Singapore ..............................6.5
2.03 Extent of staff training...........................................................41 ..... .................3.8 Sweden .................................5.7

• For those economies ranked in the top 10 in 2.04

2.05
Local availability of specialized research
and training services .............................................................31 .....
Brain drain and ease of hiring foreign labor ..........................34 .....
.................4.5
.................3.9
Switzerland ............................6.5
Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................14 ..... ...............67.1 Korea, Rep...........................94.7

the overall FDI, individual variables ranked from 2.07

Taxes
Irregular payments in tax collection ......................................48 ..... .................3.7 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......57 ..... .................2.3 Singapore ..............................5.8

1 through 10 are considered to be advantages. 2.09

2.10
Marginal tax variation ............................................................25 ..... .................5.6
Time to pay taxes..................................................................46 ..... .............453.0

Infrastructure
China..................................–24.6
United Arab Emirates ..........12.0

2.11 Quality of overall infrastructure .............................................50 ..... .................3.5 Switzerland ............................6.8

Any variables below 10 are considered to be dis- 2.12

2.13
2.14
Quality of telephone infrastructure .......................................46 .....
Internet users .......................................................................39 .....
Broadband Internet subscribers ............................................31 .....
.................5.6
...............28.1
.................8.0
Norway...................................7.0
Sweden ................................87.8
Sweden................................41.2
2.15 Telephone lines......................................................................31 ..... ...............24.4 Switzerland ..........................64.1

advantages. For instance, in the case of Switzerland, 2.16 Mobile telephone subscribers...............................................21 .....

Cost of doing business

.............116.6 Turkey ................................208.7

2.17 Cost of starting a business ...................................................38 ..... ................11.0 Denmark................................0.0

which is ranked 8 overall, its 6th rank in the (Cont’d.)

variable Bank deposits to GDP makes this variable

a development advantage, whereas Foreign exchange
derivatives turnover: Currency swaps, on which it ranks
24th, constitutes a development disadvantage for the
• In the gray box at the right of the profile is the
country.
name and raw score for the top-ranked economy
of the given indicator. For indicators in which there
• For those economies ranked from 11 through 27
60 is a tie for the top rank, the word Multiple appears
in the overall FDI, variables ranked higher than
with the number of economies that share that score
the economy’s overall rank are considered to be
in parentheses.
advantages. Any variables ranked equal to or lower
than the economy’s overall rank are considered to
be disadvantages. In the case of Malaysia, ranked
18th overall, its 10th rank in the variable Bank
deposits to GDP makes this variable a development
advantage, whereas Foreign exchange derivatives turnover:
Currency swaps, on which it ranks 30th, constitutes
a development disadvantage for the country.

• For those economies ranked lower than 27 in

the overall FDI, any individual variables ranked 27
or higher are considered as advantages. Any variables
ranked 28th or lower are considered to be disadvan-
tages. For Argentina, ranked 52nd overall, its rank of
22 in Relative value-added of insurance constitutes a
development advantage for the country, whereas its
56th rank in the variable Bank deposits to GDP
makes this variable a development disadvantage.

• After the advantage/disadvantage marker is the

raw score of the listed indicator for the profiled
economy. For more information on the significance
of the raw score, such as the units in which it is
measured or the source, please see the Data Tables
in Part 3 of this Report.
 List of Countries/Economies
List of Countries/Economies

Country/Economy Page Country/Economy Page

Argentina 62 Philippines 214

Australia 66 Poland 218
Austria 70 Romania* 222
Bahrain 74 Russian Federation 226
Bangladesh 78 Saudi Arabia 230
Belgium 82 Singapore 234
Brazil 86 Slovak Republic 238
Canada 90 South Africa 242
Chile 94 Spain 246
China 98 Sweden 250
Colombia 102 Switzerland 254
Czech Republic 106 Thailand 258
Denmark 110 Turkey 262
Egypt 114 Ukraine 266
Finland 118 United Arab Emirates 270
61
France 122 United Kingdom 274
Germany 126 United States 278
Hong Kong SAR 130 Venezuela 282
Hungary 134 Vietnam 286
India 138 * Added in 2010
Indonesia 142
Ireland 146
Israel 150
Italy 154
Japan 158
Jordan 162
Kazakhstan 166
Korea, Rep. 170
Kuwait 174
Malaysia 178
Mexico 182
Morocco* 186
Netherlands 190
Nigeria 194
Norway 198
Pakistan 202
Panama 206
Peru 210
2: Country/Economy Profiles

Argentina
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................40.1 18.3%
US$ bn
GDP (US$ billions), 2009 .........................................................310.1
n Public debt securities .......159.7
GDP (current prices) per capita, 2009 ..............................7,725.7 n Private debt securities........16.9
GDP (PPP) as share (%) of world total, 2009 ........................0.81 55.8% n Banking deposits .................57.1
20.0% n Equity securities ..................52.3
Compound annual growth rate of real GDP (%), 2005–09 ..4.88
Total 286.0
5.9%

Total/GDP 87.0%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................52 2.8

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................52 3.2

Financial sector liberalization ....................................................49 2.7
Corporate governance.................................................................48 3.8
Legal and regulatory issues .......................................................56 2.6
Contract enforcement..................................................................43 3.7
2nd pillar: Business environment .............................................42 4.0
Human capital ...............................................................................27 4.4
62
Taxes...............................................................................................53 3.4
Infrastructure ................................................................................35 3.7
Cost of doing business ................................................................44 4.5
3rd pillar: Financial stability......................................................54 3.2
Currency stability..........................................................................31 3.9
Banking system stability..............................................................53 3.3
Risk of sovereign debt crisis ......................................................54 2.5
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................43 2.9

Size index .......................................................................................46 1.4
Efficiency index.............................................................................54 3.1
Financial information disclosure..................................................2 5.7
5th pillar: Non-banking financial services .............................25 2.5
IPO activity.....................................................................................41 1.4
M&A activity..................................................................................50 1.2
Insurance .......................................................................................30 2.7
Securitization...................................................................................7 4.6
6th pillar: Financial markets......................................................53 1.4
Foreign exchange markets .........................................................44 1.0
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................53 1.2
Bond market development..........................................................39 1.9
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................56 2.2

Commercial access......................................................................56 2.4
Retail access.................................................................................40 2.0
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Argentina

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................48 .....n ...............–0.8 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......40 .....n...............43.5 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................37 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................39 .....n.................4.1 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................48 .....n.................4.2 Sweden .................................5.9
1.06 Reliance on professional management .................................37 .....n.................4.5 Sweden .................................6.5
1.07 Willingness to delegate.........................................................38 .....n.................3.7 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................55 .....n.................3.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................52 .....n.................3.3 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................52 .....n.................3.5 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................49 .....n.................2.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................56 .....n .................1.7 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................51 .....n.................3.6 South Africa...........................6.0
1.14 Property rights.......................................................................55 .....n.................2.7 Switzerland ............................6.4
1.15 Intellectual property protection .............................................56 .....n.................2.5 Sweden .................................6.2
1.16 Diversion of public funds.......................................................55 .....n.................2.1 Sweden .................................6.5
1.17 Public trust of politicians .......................................................56 .....n .................1.5 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................46 .....n.................2.9 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................29 .....n .................7.5 Sweden ...............................15.0 63
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................53 .....n.................2.2 Singapore ..............................6.5
1.22 Judicial independence ...........................................................54 .....n.................2.6 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................49 .....n.................3.1 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................40 .....n.............590.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................34 .....n...............36.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................44 .....n.................4.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts ...................................................12 .....n ...............16.5 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................13 .....n.................5.3 Switzerland ............................6.1
2.02 Quality of math and science education.................................46 .....n.................3.2 Singapore ..............................6.5
2.03 Extent of staff training...........................................................41 .....n.................3.8 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................31 .....n.................4.5 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................34 .....n.................3.9 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................14 .....n ...............67.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................48 .....n.................3.7 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......57 .....n.................2.3 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................25 .....n.................5.6 China..................................–24.6
2.10 Time to pay taxes..................................................................46 .....n.............453.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................50 .....n.................3.5 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................46 .....n.................5.6 Norway...................................7.0
2.13 Internet users .......................................................................39 .....n...............28.1 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................31 .....n.................8.0 Sweden................................41.2
2.15 Telephone lines......................................................................31 .....n...............24.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................21 .....n .............116.6 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................38 .....n................11.0 Denmark................................0.0

(Cont’d.)
2: Country/Economy Profiles

Argentina
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................47 .....n .................7.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................29 .....n ...............12.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................38 .....n ...............27.0 Australia.................................2.0
2.21 Time to register property ......................................................44 .....n...............52.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................33 .....n.................2.8 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................45 .....n ...............–1.6 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................26 .....n .............100.2 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................24 .....n.................2.2 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................31 .....n...............25.8 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................20 .....n...............38.2 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................57 .....n.................4.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................41 .....n.................3.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ...........................13 .....n.................5.9 Ireland....................................6.8
3.10 Financial Stress Index .............................................................8 .....n .................1.2 Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
64 3.12 Output loss during banking crises.........................................55 .....n .............165.9 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................55 .....n.................5.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................55 .....n.................5.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................35 .....n.................4.8 Panama..................................6.0
3.16 Manageability of public debt ................................................32 .....n...............48.7 Chile ......................................6.1
3.17 Credit default swap spreads .................................................51 .....n.............970.1 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................53 .....n...............20.5 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................10 .....n.................5.8 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................53 .....n...............20.1 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................57 .....n ...............27.6 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................53 .....n ...............14.0 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................56 .....n...............20.1 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................23 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................52 .....n.................2.4 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................54 .....n .................7.7 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................35 .....n................11.7 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................57 .....n .................7.0 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................16 .....n.................3.1 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage................................................1 .....n .............100.0 Argentina ...........................100.0
4.14 Public credit registry coverage ................................................5 .....n...............34.3 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................34 .....n.................0.4 China ...................................22.0
5.02 IPO proceeds amount ...........................................................32 .....n.................0.2 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................44 .....n.................0.2 China....................................12.6
 Argentina

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................44 .....n.................0.1 United States ......................36.0
5.05 M&A transaction value to GDP .............................................51 .....n .................1.3 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................40 .....n.................0.3 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................44 .....n.................0.5 Ireland..................................15.6
5.08 Non–life insurance density ...................................................24 .....n.................2.1 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums .............................8 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................38 .....n.................0.2 India.....................................55.4
5.11 Non–life insurance coverage .................................................21 .....n.................0.8 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................22 .....n .................1.3 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................29 .....n .................1.2 United States.......................10.8
5.14 Share of total number of securitization deals .........................4 .....n.................3.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................38 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................42 .....n.................0.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
65
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................45 .....n................17.0 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................46 .....n...............30.4 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................40 .....n.................4.8 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................38 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............33 .....n.................3.6 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............36 .....n ...............16.2 Japan .................................184.6
6.15 Private international bonds to GDP .......................................45 .....n.................2.0 Ireland................................215.3
6.16 Public international bonds to GDP ..........................................8 .....n ...............15.1 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................38 .....n.................0.0 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................55 .....n.................3.4 Switzerland ............................6.6
7.02 Venture capital availability......................................................57 .....n .................1.9 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................48 .....n.................2.4 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................55 .....n.................2.4 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................57 .....n .................1.7 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................40 .....n.................2.9 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................23 .....n........90,628.8 Japan............................717,241.6
7.08 Commercial bank branches ...................................................31 .....n ...............13.2 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................36 .....n...............36.9 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................21 .....n.................0.8 Bangladesh ..........................41.2
2: Country/Economy Profiles

Australia
Key indicators Financial assets by major type, 2008
6.1%
Population (millions), 2009 .......................................................21.9 US$ bn
23.5%
GDP (US$ billions), 2009 .........................................................997.2
n Public debt securities .......175.5
GDP (current prices) per capita, 2009 ............................45,586.5 n Private debt securities...1,186.8
GDP (PPP) as share (%) of world total, 2009 ........................1.17 41.4% n Banking deposits ...............831.9
Compound annual growth rate of real GDP (%), 2005–09 ..2.19 n Equity securities ................675.6

29.0% Total 2,869.9

Total/GDP 270.9%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index........................................................5 5.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................18 5.5

Financial sector liberalization ....................................................28 5.3
Corporate governance...................................................................8 5.5
Legal and regulatory issues .........................................................7 5.4
Contract enforcement....................................................................7 5.7
2nd pillar: Business environment .............................................13 5.5
Human capital ...............................................................................11 5.2
66
Taxes...............................................................................................20 5.1
Infrastructure ................................................................................18 5.4
Cost of doing business ..................................................................6 6.3
3rd pillar: Financial stability........................................................9 5.2
Currency stability..........................................................................42 3.3
Banking system stability................................................................9 5.5
Risk of sovereign debt crisis ........................................................1 6.7
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services........................................7 5.1

Size index .........................................................................................8 4.3
Efficiency index...............................................................................4 6.4
Financial information disclosure..................................................3 4.0
5th pillar: Non-banking financial services ...............................8 4.0
IPO activity.......................................................................................9 3.5
M&A activity....................................................................................5 5.3
Insurance .......................................................................................17 3.3
Securitization.................................................................................11 3.8
6th pillar: Financial markets........................................................6 4.7
Foreign exchange markets ...........................................................7 4.8
Derivatives markets .......................................................................5 6.7
Equity market development ..........................................................5 5.3
Bond market development..........................................................23 2.6
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access..........................................................1 5.2

Commercial access......................................................................11 4.1
Retail access...................................................................................1 6.4
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Australia

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................30 .....n .................1.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......37 .....n...............28.8 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ................................8 .....n.................4.9 Canada...................................5.2
1.05 Efficacy of corporate boards ...................................................6 .....n.................5.5 Sweden .................................5.9
1.06 Reliance on professional management ...................................7 .....n.................6.0 Sweden .................................6.5
1.07 Willingness to delegate .........................................................10 .....n.................4.9 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .........................8 .....n.................5.8 South Africa...........................6.4
1.09 Ethical behavior of firms..........................................................9 .....n.................6.2 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ........................9 .....n.................5.2 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................21 .....n.................3.4 Singapore ..............................5.5
1.12 Centralization of economic policymaking ................................6 .....n.................4.4 Switzerland ............................5.6
1.13 Regulation of securities exchanges.........................................8 .....n.................5.5 South Africa...........................6.0
1.14 Property rights .......................................................................12 .....n.................5.9 Switzerland ............................6.4
1.15 Intellectual property protection..............................................11 .....n.................5.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................10 .....n.................5.8 Sweden .................................6.5
1.17 Public trust of politicians........................................................11 .....n.................4.6 Singapore ..............................6.4
1.18 Corruption perceptions index ..................................................7 .....n.................8.7 Denmark................................9.3
1.19 Strength of legal rights index ..................................................4 .....n.................9.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................14 .....n ...............10.5 Sweden ...............................15.0 67
Contract enforcement
1.21 Effectiveness of law-making bodies ........................................3 .....n.................5.7 Singapore ..............................6.5
1.22 Judicial independence .............................................................7 .....n.................6.3 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................15 .....n.................6.2 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................15 .....n.............395.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................8 .....n...............28.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................27 .....n.................5.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................21 .....n...............20.7 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................14 .....n.................5.3 Switzerland ............................6.1
2.02 Quality of math and science education.................................12 .....n.................4.9 Singapore ..............................6.5
2.03 Extent of staff training...........................................................16 .....n.................4.8 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................18 .....n.................5.3 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................24 .....n.................4.2 Switzerland ............................5.7
2.06 Tertiary enrollment ..................................................................9 .....n...............75.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................15 .....n.................6.2 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition .......17 .....n.................4.5 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................30 .....n.................9.0 China..................................–24.6
2.10 Time to pay taxes ..................................................................10 .....n..............107.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................23 .....n.................5.2 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................44 .....n.................5.9 Norway...................................7.0
2.13 Internet users .......................................................................14 .....n...............72.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................14 .....n...............24.4 Sweden................................41.2
2.15 Telephone lines......................................................................13 .....n...............44.5 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................28 .....n .............105.0 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business .....................................................9 .....n.................0.8 Denmark................................0.0

(Cont’d.)
2: Country/Economy Profiles

Australia
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................36 .....n.................4.9 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................17 .....n.................8.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................1 .....n.................2.0 Australia.................................2.0
2.21 Time to register property ........................................................5 .....n.................5.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................8 .....n .................1.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................24 .....n .................1.5 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................49 .....n ...............–4.9 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)...........................................................15 .....n .............–61.2 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator....................................................1 .....n.................9.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................31 .....n.................4.7 Ireland....................................6.8
3.10 Financial Stress Index............................................................15 .....n.................3.8 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................33 .....n.................8.1 Jordan..................................16.8
68 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................14 .....n.................5.6 Panama..................................6.0
3.16 Manageability of public debt ..................................................9 .....n...............22.0 Chile ......................................6.1
3.17 Credit default swap spreads..................................................12 .....n...............59.6 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................15 .....n .............121.2 Denmark ............................219.5
4.02 Central bank assets to GDP ....................................................7 .....n.................6.2 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................12 .....n ...............97.6 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................18 .....n...............99.4 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................12 .....n .............121.4 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................13 .....n...............98.1 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ........................................7 .....n.................5.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ..............................................9 .....n.................5.1 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................15 .....n .................1.6 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................22 .....n.................2.9 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................17 .....n .................1.3 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ...............................1 .....n .................1.1 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage................................................1 .....n .............100.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ....................................................................9 .....n.................2.1 China ...................................22.0
5.02 IPO proceeds amount ...........................................................23 .....n.................0.3 Kazakhstan.............................1.1
5.03 Share of world IPOs ................................................................9 .....n.................5.0 China....................................12.6
 Australia

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................11 .....n.................3.0 United States ......................36.0
5.05 M&A transaction value to GDP ...............................................7 .....n ...............10.5 Netherlands .........................14.2
5.06 Share of total number of M&A deals ......................................6 .....n.................4.2 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................20 .....n.................3.3 Ireland..................................15.6
5.08 Non–life insurance density ...................................................18 .....n.................2.8 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................12 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................21 .....n.................0.7 India.....................................55.4
5.11 Non–life insurance coverage .................................................29 .....n.................0.6 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................12 .....n.................2.1 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................12 .....n.................2.8 United States.......................10.8
5.14 Share of total number of securitization deals........................15 .....n .................1.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ..............................................6 .....n.................3.5 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ...........................8 .....n.................3.4 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ............................................7 .....n.................5.0 United Kingdom ..................40.8

Derivatives markets
69
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................10 .....n .................1.1 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................10 .....n .................1.1 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................12 .....n.................0.5 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ........3 .....n.................5.6 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options .....................8 .....n .................1.9 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................13 .....n .............141.2 Italy....................................348.2
6.10 Stock market capitalization to GDP .........................................9 .....n .............162.6 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP..........................................9 .....n.............236.1 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people.....................4 .....n .................1.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ..............8 .....n...............60.3 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............35 .....n................17.2 Japan .................................184.6
6.15 Private international bonds to GDP .......................................12 .....n ...............51.1 Ireland................................215.3
6.16 Public international bonds to GDP ........................................36 .....n .................1.5 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................31 .....n.................0.2 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication..............................................10 .....n.................6.1 Switzerland ............................6.6
7.02 Venture capital availability........................................................9 .....n.................3.8 Hong Kong SAR ....................4.4
7.03 Ease of access to credit .......................................................35 .....n.................2.7 Indonesia ...............................4.3
7.04 Financing through local equity market...................................11 .....n.................4.6 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................12 .....n.................3.9 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................21 .....n.................4.7 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................11 .....n ...............31.9 Ireland ..................................57.3
7.09 Total number of ATMs.............................................................3 .....n .............156.7 Canada...............................218.5
7.10 Total number of point of sale (POS) devices...........................2 .....n..........4,039.6 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
2: Country/Economy Profiles

Austria
Key indicators Financial assets by major type, 2008
6.1%
Population (millions), 2009 .........................................................8.3 21.9% US$ bn
GDP (US$ billions), 2009 .........................................................381.9
n Public debt securities .......259.9
GDP (current prices) per capita, 2009 ............................45,989.2 30.8% n Private debt securities......487.9
GDP (PPP) as share (%) of world total, 2009 ........................0.46 n Banking deposits ...............364.9
Compound annual growth rate of real GDP (%), 2005–09 ..1.05 n Equity securities ..................72.3

Total 1,185.0
41.2%

Total/GDP 285.7%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................19 4.2

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................12 5.7

Financial sector liberalization ......................................................1 7.0
Corporate governance.................................................................13 5.1
Legal and regulatory issues .......................................................12 5.1
Contract enforcement..................................................................16 5.4
2nd pillar: Business environment .............................................16 5.4
Human capital ...............................................................................18 4.8
70
Taxes...............................................................................................11 5.7
Infrastructure ................................................................................10 5.8
Cost of doing business ................................................................28 5.2
3rd pillar: Financial stability......................................................21 4.8
Currency stability..........................................................................33 3.9
Banking system stability..............................................................26 4.7
Risk of sovereign debt crisis ......................................................11 5.9
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................18 4.2

Size index .......................................................................................16 3.7
Efficiency index.............................................................................18 5.7
Financial information disclosure................................................32 2.2
5th pillar: Non-banking financial services .............................40 2.0
IPO activity.....................................................................................28 2.0
M&A activity..................................................................................29 2.0
Insurance .......................................................................................34 2.6
Securitization.................................................................................46 1.3
6th pillar: Financial markets......................................................21 2.9
Foreign exchange markets .........................................................20 1.4
Derivatives markets .....................................................................22 2.4
Equity market development ........................................................34 2.2
Bond market development............................................................4 4.9
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access..........................................................8 4.5

Commercial access......................................................................32 3.5
Retail access...................................................................................4 5.6
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Austria

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n ...............71.6 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................21 .....n.................4.5 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................20 .....n.................5.0 Sweden .................................5.9
1.06 Reliance on professional management .................................17 .....n.................5.3 Sweden .................................6.5
1.07 Willingness to delegate .........................................................15 .....n.................4.6 Sweden .................................6.5
1.08 Strength of auditing and reporting standards........................10 .....n.................5.7 South Africa...........................6.4
1.09 Ethical behavior of firms ........................................................10 .....n.................6.2 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................22 .....n.................4.8 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................13 .....n.................3.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ................................9 .....n.................4.4 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................28 .....n.................4.7 South Africa...........................6.0
1.14 Property rights.........................................................................6 .....n.................6.2 Switzerland ............................6.4
1.15 Intellectual property protection ...............................................8 .....n.................5.7 Sweden .................................6.2
1.16 Diversion of public funds.......................................................13 .....n.................5.7 Sweden .................................6.5
1.17 Public trust of politicians .......................................................15 .....n.................4.0 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................13 .....n .................7.9 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 71
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................16 .....n.................4.4 Singapore ..............................6.5
1.22 Judicial independence ...........................................................14 .....n.................5.8 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................13 .....n.................6.3 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................17 .....n .............397.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................4 .....n...............25.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................52 .....n.................4.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts ...................................................17 .....n...............18.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................23 .....n.................4.9 Switzerland ............................6.1
2.02 Quality of math and science education.................................20 .....n.................4.7 Singapore ..............................6.5
2.03 Extent of staff training...........................................................13 .....n.................4.9 Sweden .................................5.7
2.04 Local availability of specialized research
and training services ...............................................................6 .....n.................5.9 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................30 .....n.................3.9 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................27 .....n ...............51.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................12 .....n.................6.3 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......20 .....n.................4.5 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................13 .....n ...............–9.6 China..................................–24.6
2.10 Time to pay taxes..................................................................20 .....n .............171.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure ...............................................5 .....n.................6.4 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .........................................9 .....n.................6.8 Norway...................................7.0
2.13 Internet users .......................................................................15 .....n ...............71.2 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................19 .....n...............20.7 Sweden................................41.2
2.15 Telephone lines......................................................................19 .....n...............39.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers.................................................9 .....n .............129.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................23 .....n.................5.1 Denmark................................0.0

(Cont’d.)
2: Country/Economy Profiles

Austria
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................34 .....n.................4.5 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................39 .....n...............18.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................41 .....n...............28.0 Australia.................................2.0
2.21 Time to register property ......................................................29 .....n...............32.0 Multiple (3) ............................2.0
2.22 Time to close a business.......................................................11 .....n .................1.1 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................36 .....n.................0.4 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................21 .....n.................2.7 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)...........................................................10 .....n .............–15.5 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................32 .....n.................4.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................25 .....n.................5.0 Ireland....................................6.8
3.10 Financial Stress Index............................................................12 .....n .................1.9 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................22 .....n................11.0 Jordan..................................16.8
72 3.12 Output loss during banking crises.........................................29 .....n...............34.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................25 .....n.................5.3 Panama..................................6.0
3.16 Manageability of public debt ................................................46 .....n ...............67.1 Chile ......................................6.1
3.17 Credit default swap spreads..................................................16 .....n...............89.2 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................12 .....n .............123.0 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................23 .....n .................1.4 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................15 .....n...............89.3 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................16 .....n .............105.3 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................13 .....n ..............111.6 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................16 .....n...............89.0 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ........................................9 .....n.................3.9 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................34 .....n.................4.1 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................37 .....n.................3.2 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................24 .....n .................1.6 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................10 .....n.................2.3 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................27 .....n...............39.2 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................19 .....n .................1.4 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................22 .....n.................0.9 China ...................................22.0
5.02 IPO proceeds amount ...........................................................18 .....n.................0.4 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................40 .....n.................0.2 China....................................12.6
 Austria

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................24 .....n.................0.5 United States ......................36.0
5.05 M&A transaction value to GDP .............................................28 .....n.................4.3 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................29 .....n.................0.5 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................22 .....n.................2.7 Ireland..................................15.6
5.08 Non–life insurance density ...................................................12 .....n.................3.3 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................31 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................37 .....n.................0.2 India.....................................55.4
5.11 Non–life insurance coverage .................................................38 .....n.................0.3 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................31 .....n .................1.0 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................45 .....n.................0.5 United States.......................10.8
5.14 Share of total number of securitization deals .......................44 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................20 .....n.................0.4 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................19 .....n.................0.4 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................20 .....n.................0.5 United Kingdom ..................40.8

Derivatives markets
73
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................20 .....n.................0.2 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................18 .....n.................0.3 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................20 .....n.................0.1 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......18 .....n.................0.5 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................16 .....n.................0.3 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................26 .....n...............69.5 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................34 .....n...............63.5 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................28 .....n...............42.7 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ..................n/a .........................n/a Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ..............6 .....n...............60.7 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............22 .....n...............32.1 Japan .................................184.6
6.15 Private international bonds to GDP .......................................10 .....n...............66.8 Ireland................................215.3
6.16 Public international bonds to GDP ..........................................3 .....n...............28.5 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................10 .....n.................2.0 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................22 .....n.................5.6 Switzerland ............................6.6
7.02 Venture capital availability......................................................30 .....n.................2.9 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................42 .....n.................2.6 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................38 .....n.................3.8 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................27 .....n.................3.2 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................31 .....n.................3.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts .....................................5 .....n......240,270.8 Japan............................717,241.6
7.08 Commercial bank branches ...................................................12 .....n ...............27.5 Ireland ..................................57.3
7.09 Total number of ATMs.............................................................7 .....n .............118.9 Canada...............................218.5
7.10 Total number of point of sale (POS) devices...........................1 .....n ..........4,174.1 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
2: Country/Economy Profiles

Bahrain
Key indicators Financial assets by major type, 2008
11.5%
Population (millions), 2009 .........................................................1.0 US$ bn
GDP (US$ billions), 2009 ...........................................................20.2 11.4%
n Public debt securities ...........5.6
GDP (current prices) per capita, 2009 ............................19,455.3 n Private debt securities..........5.6
43.0%
GDP (PPP) as share (%) of world total, 2009 ........................0.04 n Banking deposits .................16.8
Compound annual growth rate of real GDP (%), 2005–09 ..4.70 n Equity securities ..................21.2

Total 49.3
34.2%

Total/GDP 232.1%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................23 4.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................21 5.0

Financial sector liberalization ....................................................15 6.7
Corporate governance.................................................................24 4.8
Legal and regulatory issues .......................................................25 4.2
Contract enforcement..................................................................31 4.3
2nd pillar: Business environment .............................................14 5.5
Human capital ...............................................................................32 4.3
74
Taxes.................................................................................................1 6.4
Infrastructure ................................................................................22 5.1
Cost of doing business ................................................................10 6.0
3rd pillar: Financial stability......................................................23 4.7
Currency stability..........................................................................50 2.4
Banking system stability................................................................3 5.9
Risk of sovereign debt crisis ......................................................22 5.5
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................14 4.6

Size index .....................................................................................n/a n/a
Efficiency index.............................................................................14 5.9
Financial information disclosure................................................36 2.0
5th pillar: Non-banking financial services .............................38 2.0
IPO activity...................................................................................n/a n/a
M&A activity..................................................................................27 2.3
Insurance .......................................................................................28 2.7
Securitization.................................................................................56 1.0
6th pillar: Financial markets......................................................42 1.7
Foreign exchange markets .........................................................35 1.1
Derivatives markets .....................................................................31 1.3
Equity market development ........................................................27 2.5
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access..........................................................9 4.5

Commercial access........................................................................6 4.5
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Bahrain

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services .......17 .....n...............54.0 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................22 .....n.................4.5 Canada...................................5.2
1.05 Efficacy of corporate boards..................................................16 .....n.................5.0 Sweden .................................5.9
1.06 Reliance on professional management .................................42 .....n.................4.2 Sweden .................................6.5
1.07 Willingness to delegate.........................................................23 .....n.................4.2 Sweden .................................6.5
1.08 Strength of auditing and reporting standards........................12 .....n.................5.6 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................21 .....n.................5.3 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................13 .....n.................5.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation ...........................................9 .....n.................4.0 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................41 .....n.................2.8 Switzerland ............................5.6
1.13 Regulation of securities exchanges .......................................10 .....n.................5.4 South Africa...........................6.0
1.14 Property rights .......................................................................16 .....n.................5.6 Switzerland ............................6.4
1.15 Intellectual property protection .............................................18 .....n.................5.2 Sweden .................................6.2
1.16 Diversion of public funds.......................................................15 .....n.................5.3 Sweden .................................6.5
1.17 Public trust of politicians .......................................................14 .....n.................4.1 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................24 .....n.................5.1 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................42 .....n.................3.5 Sweden ...............................15.0 75
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................31 .....n.................3.7 Singapore ..............................6.5
1.22 Judicial independence ...........................................................20 .....n.................5.0 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................22 .....n.................5.5 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................45 .....n.............635.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................55 .....n...............48.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................27 .....n.................5.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts ...................................................11 .....n ...............14.7 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................27 .....n.................4.6 Switzerland ............................6.1
2.02 Quality of math and science education.................................26 .....n.................4.5 Singapore ..............................6.5
2.03 Extent of staff training...........................................................15 .....n.................4.9 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................50 .....n.................3.9 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................11 .....n.................4.8 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................41 .....n...............32.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ........................................6 .....n.................6.5 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.........3 .....n.................5.7 Singapore ..............................5.8
2.09 Marginal tax variation ..............................................................8 .....n .............–14.7 China..................................–24.6
2.10 Time to pay taxes....................................................................2 .....n...............36.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................19 .....n.................5.6 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................27 .....n.................6.4 Norway...................................7.0
2.13 Internet users .......................................................................26 .....n...............52.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................25 .....n ...............14.2 Sweden................................41.2
2.15 Telephone lines......................................................................28 .....n...............28.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers.................................................2 .....n.............185.8 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business .....................................................4 .....n.................0.5 Denmark................................0.0

(Cont’d.)
2: Country/Economy Profiles

Bahrain
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................10 .....n.................0.9 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................27 .....n ...............10.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................14 .....n.................9.0 Australia.................................2.0
2.21 Time to register property ......................................................27 .....n ...............31.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................30 .....n.................2.5 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................50 .....n ...............–3.3 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................35 .....n.............775.2 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP.............................................8 .....n ...............10.2 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................35 .....n .............169.6 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
76 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................31 .....n ...............15.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................26 .....n ...............15.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ......................................2 .....n.................6.0 Panama..................................6.0
3.16 Manageability of public debt ................................................21 .....n...............38.8 Chile ......................................6.1
3.17 Credit default swap spreads .................................................37 .....n .............175.7 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP ....................................n/a .........................n/a Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP .......................................n/a .........................n/a Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................19 .....n...............93.7 Hong Kong SAR ................329.5
4.05 Private credit to GDP ............................................................n/a .........................n/a United States.....................210.7
4.06 Bank deposits to GDP ...........................................................21 .....n...............79.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ..............................................6 .....n.................6.0 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................38 .....n.................3.5 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................39 .....n................17.3 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................13 .....n .................1.1 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................28 .....n...............34.9 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share .................................................................n/a .........................n/a China ...................................22.0
5.02 IPO proceeds amount ..........................................................n/a .........................n/a Kazakhstan.............................1.1
5.03 Share of world IPOs .............................................................n/a .........................n/a China....................................12.6
 Bahrain

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................53 .....n.................0.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................14 .....n .................7.9 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................55 .....n.................0.0 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................41 .....n.................0.7 Ireland..................................15.6
5.08 Non–life insurance density ...................................................33 .....n .................1.8 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ..........................n/a .........................n/a China .....................................0.3
5.10 Life insurance coverage ........................................................56 .....n.................0.0 India.....................................55.4
5.11 Non–life insurance coverage .................................................56 .....n.................0.0 China....................................14.6
5.12 Relative value-added of insurance to GDP ..............................1 .....n.................5.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................56 .....n.................0.1 United States.......................10.8
5.14 Share of total number of securitization deals .......................56 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................34 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................26 .....n.................0.2 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................38 .....n.................0.0 United Kingdom ..................40.8

Derivatives markets
77
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................29 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......27 .....n.................0.1 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................24 .....n.................0.1 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................48 .....n.................5.0 Italy....................................348.2
6.10 Stock market capitalization to GDP ......................................n/a .........................n/a Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people.....................9 .....n.................0.5 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................22 .....n...............26.1 Ireland................................215.3
6.16 Public international bonds to GDP ........................................25 .....n.................3.5 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................23 .....n.................5.5 Switzerland ............................6.6
7.02 Venture capital availability......................................................14 .....n.................3.7 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................12 .....n.................3.8 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................35 .....n.................3.9 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ..........................................................1 .....n.................4.9 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP .........................................11 .....n.................8.9 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ..................................................n/a .........................n/a Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
2: Country/Economy Profiles

Bangladesh
Key indicators Financial assets by major type, 2008
8.1%
Population (millions), 2009 .....................................................164.7 US$ bn
GDP (US$ billions), 2009 ...........................................................94.5
n Public debt securities .........33.6
40.9%
GDP (current prices) per capita, 2009 .................................573.8 n Private debt securities.........n/a
GDP (PPP) as share (%) of world total, 2009 ........................0.35 n Banking deposits .................41.9
Compound annual growth rate of real GDP (%), 2005–09 ..4.83 n Equity securities ....................6.7
51.0% Total 82.2

Total/GDP 97.2%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................55 2.6

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................56 2.5

Financial sector liberalization ....................................................57 1.0
Corporate governance.................................................................57 3.4
Legal and regulatory issues .......................................................52 2.9
Contract enforcement..................................................................57 2.8
2nd pillar: Business environment .............................................57 2.8
Human capital ...............................................................................57 2.9
78
Taxes...............................................................................................48 3.9
Infrastructure ................................................................................57 2.0
Cost of doing business ................................................................57 2.4
3rd pillar: Financial stability......................................................30 4.5
Currency stability............................................................................7 5.5
Banking system stability..............................................................28 4.6
Risk of sovereign debt crisis ......................................................49 3.5
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................45 2.8

Size index .......................................................................................36 2.1
Efficiency index.............................................................................44 4.3
Financial information disclosure................................................55 1.0
5th pillar: Non-banking financial services .............................57 1.1
IPO activity.....................................................................................47 1.2
M&A activity..................................................................................57 1.0
Insurance .......................................................................................54 1.3
Securitization.................................................................................56 1.0
6th pillar: Financial markets......................................................57 1.0
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................55 1.0
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................35 3.1

Commercial access......................................................................48 3.0
Retail access.................................................................................20 3.2
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Bangladesh

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................49 .....n ...............–1.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......49 .....n.................0.0 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ................................n/a .........................n/a Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................57 .....n.................2.9 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................55 .....n.................4.0 Sweden .................................5.9
1.06 Reliance on professional management .................................48 .....n.................3.9 Sweden .................................6.5
1.07 Willingness to delegate.........................................................57 .....n.................2.8 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................54 .....n.................3.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................53 .....n.................3.3 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................53 .....n.................3.4 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................37 .....n.................2.9 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................54 .....n .................1.9 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................33 .....n.................4.4 South Africa...........................6.0
1.14 Property rights.......................................................................52 .....n.................3.4 Switzerland ............................6.4
1.15 Intellectual property protection .............................................54 .....n.................2.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................49 .....n.................2.6 Sweden .................................6.5
1.17 Public trust of politicians .......................................................46 .....n.................2.0 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................52 .....n.................2.4 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency....................................................n/a .........................n/a Sweden ...............................15.0 79
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................42 .....n.................3.0 Singapore ..............................6.5
1.22 Judicial independence ...........................................................47 .....n.................3.4 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................48 .....n.................3.2 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................57 .....n ...........1442.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................48 .....n ...............41.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................15 .....n.................6.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................56 .....n...............63.3 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................46 .....n.................3.8 Switzerland ............................6.1
2.02 Quality of math and science education.................................45 .....n.................3.2 Singapore ..............................6.5
2.03 Extent of staff training...........................................................57 .....n.................3.1 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................57 .....n.................3.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................55 .....n.................3.1 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................56 .....n .................7.2 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................57 .....n.................2.3 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......27 .....n.................4.2 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................37 .....n.............302.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................55 .....n.................2.7 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................53 .....n.................5.0 Norway...................................7.0
2.13 Internet users .......................................................................57 .....n.................0.4 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................57 .....n.................0.0 Sweden................................41.2
2.15 Telephone lines......................................................................57 .....n.................0.8 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................57 .....n ...............27.9 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................54 .....n...............36.2 Denmark................................0.0

(Cont’d.)
2: Country/Economy Profiles

Bangladesh
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................53 .....n ...............10.2 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................17 .....n.................8.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................51 .....n...............44.0 Australia.................................2.0
2.21 Time to register property ......................................................57 .....n.............245.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................43 .....n.................4.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) ....................n/a .........................n/a Venezuela ............................14.5
3.02 External vulnerability indicator.................................................5 .....n...............22.7 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................25 .....n.................2.0 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................12 .....n...............25.8 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................16 .....n .................1.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator.................................................n/a .........................n/a Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................44 .....n.................5.9 Jordan..................................16.8
80 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................51 .....n.................8.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................50 .....n.................8.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................28 .....n.................5.2 Panama..................................6.0
3.16 Manageability of public debt ................................................20 .....n ...............37.5 Chile ......................................6.1
3.17 Credit default swap spreads.................................................n/a .........................n/a Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................39 .....n...............52.9 Denmark ............................219.5
4.02 Central bank assets to GDP ....................................................8 .....n.................6.1 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................37 .....n...............50.5 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................43 .....n...............50.4 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................44 .....n...............35.9 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................38 .....n...............50.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ..............................................7 .....n.................5.2 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................28 .....n.................2.4 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................54 .....n...............58.7 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................38 .....n.................2.6 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................49 .....n.................0.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................22 .....n.................0.9 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................53 .....n.................0.0 China ...................................22.0
5.02 IPO proceeds amount ...........................................................48 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................22 .....n.................0.7 China....................................12.6
 Bangladesh

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................57 .....n.................0.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................57 .....n.................0.2 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................57 .....n.................0.0 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................42 .....n.................0.7 Ireland..................................15.6
5.08 Non–life insurance density ...................................................57 .....n.................0.2 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ..........................n/a .........................n/a China .....................................0.3
5.10 Life insurance coverage.........................................................15 .....n .................1.1 India.....................................55.4
5.11 Non–life insurance coverage .................................................32 .....n.................0.4 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................52 .....n.................0.5 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................57 .....n.................0.0 United States.......................10.8
5.14 Share of total number of securitization deals .......................56 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
81
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ..................................................n/a .........................n/a Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................50 .....n................11.1 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................45 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................54 .....n.................0.0 Ireland................................215.3
6.16 Public international bonds to GDP ........................................51 .....n.................0.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................56 .....n.................3.2 Switzerland ............................6.6
7.02 Venture capital availability......................................................49 .....n.................2.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................11 .....n.................3.9 Indonesia ...............................4.3
7.04 Financing through local equity market ....................................9 .....n.................4.6 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................45 .....n.................2.6 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................46 .....n .................1.1 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................36 .....n ........31,667.1 Japan............................717,241.6
7.08 Commercial bank branches ...................................................46 .....n.................5.2 Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .......................................................................1 .....n ...............41.2 Bangladesh ..........................41.2
2: Country/Economy Profiles

Belgium
Key indicators Financial assets by major type, 2008
9.0%
Population (millions), 2009 .......................................................10.8 US$ bn
24.5%
GDP (US$ billions), 2009 .........................................................470.4
n Public debt securities .......455.5
GDP (current prices) per capita, 2009 ............................43,533.3 25.9% n Private debt securities......755.3
GDP (PPP) as share (%) of world total, 2009 ........................0.55 n Banking deposits ...............482.9
Compound annual growth rate of real GDP (%), 2005–09 ..0.67 n Equity securities ................167.4

Total 1,861.2
40.6%
Total/GDP 367.6%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................10 4.6

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................13 5.6

Financial sector liberalization ......................................................1 7.0
Corporate governance.................................................................16 5.1
Legal and regulatory issues .......................................................14 4.8
Contract enforcement..................................................................13 5.5
2nd pillar: Business environment .............................................11 5.5
Human capital .................................................................................7 5.5
82
Taxes.................................................................................................8 5.8
Infrastructure ................................................................................12 5.7
Cost of doing business ................................................................29 5.2
3rd pillar: Financial stability......................................................19 4.8
Currency stability........................................................................n/a n/a
Banking system stability..............................................................29 4.5
Risk of sovereign debt crisis ......................................................25 5.3
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services........................................9 4.9

Size index .......................................................................................14 3.9
Efficiency index...............................................................................3 6.4
Financial information disclosure................................................15 3.7
5th pillar: Non-banking financial services .............................23 2.5
IPO activity.....................................................................................26 2.0
M&A activity..................................................................................22 2.7
Insurance .......................................................................................24 2.8
Securitization.................................................................................22 2.6
6th pillar: Financial markets......................................................13 4.1
Foreign exchange markets .........................................................12 2.3
Derivatives markets .....................................................................11 5.3
Equity market development ........................................................25 2.9
Bond market development............................................................1 5.6
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access..........................................................3 5.1

Commercial access........................................................................7 4.4
Retail access...................................................................................2 5.8
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Belgium

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n...............72.8 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................24 .....n.................4.4 Canada...................................5.2
1.05 Efficacy of corporate boards..................................................18 .....n.................5.0 Sweden .................................5.9
1.06 Reliance on professional management .................................15 .....n.................5.5 Sweden .................................6.5
1.07 Willingness to delegate .........................................................12 .....n.................4.8 Sweden .................................6.5
1.08 Strength of auditing and reporting standards........................15 .....n.................5.6 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................17 .....n.................5.5 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................18 .....n.................4.9 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................47 .....n.................2.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ................................2 .....n.................5.4 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................25 .....n.................4.8 South Africa...........................6.0
1.14 Property rights.......................................................................18 .....n.................5.4 Switzerland ............................6.4
1.15 Intellectual property protection .............................................19 .....n.................5.1 Sweden .................................6.2
1.16 Diversion of public funds.......................................................21 .....n.................5.1 Sweden .................................6.5
1.17 Public trust of politicians .......................................................26 .....n.................3.4 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................17 .....n .................7.1 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 83
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................35 .....n.................3.3 Singapore ..............................6.5
1.22 Judicial independence ...........................................................18 .....n.................5.2 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................17 .....n.................5.9 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................27 .....n.............505.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................4 .....n...............25.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................12 .....n .................7.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts ...................................................14 .....n ...............16.6 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools .............................................3 .....n.................6.0 Switzerland ............................6.1
2.02 Quality of math and science education...................................2 .....n.................6.2 Singapore ..............................6.5
2.03 Extent of staff training...........................................................14 .....n.................4.9 Sweden .................................5.7
2.04 Local availability of specialized research
and training services ...............................................................9 .....n.................5.8 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................17 .....n.................4.6 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................16 .....n...............62.5 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................22 .....n.................5.8 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......25 .....n.................4.4 Singapore ..............................5.8
2.09 Marginal tax variation ..............................................................6 .....n .............–16.2 China..................................–24.6
2.10 Time to pay taxes ..................................................................18 .....n .............156.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................15 .....n.................5.8 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................24 .....n.................6.5 Norway...................................7.0
2.13 Internet users .......................................................................16 .....n...............68.9 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................12 .....n...............28.0 Sweden................................41.2
2.15 Telephone lines......................................................................16 .....n...............42.1 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................26 .....n ..............111.6 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................24 .....n.................5.3 Denmark................................0.0

(Cont’d.)
2: Country/Economy Profiles

Belgium
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................56 .....n ...............12.7 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................5 .....n.................4.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................3 .....n.................4.0 Australia.................................2.0
2.21 Time to register property ......................................................50 .....n...............79.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................5 .....n.................0.9 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................16 .....n.................2.5 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................30 .....n ...............–0.2 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ...........................12 .....n.................5.9 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................35 .....n ...............10.7 Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................13 .....n................11.8 Jordan..................................16.8
84 3.12 Output loss during banking crises.........................................35 .....n...............46.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................15 .....n ...............19.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................15 .....n ...............19.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................21 .....n.................5.4 Panama..................................6.0
3.16 Manageability of public debt ................................................54 .....n...............96.7 Chile ......................................6.1
3.17 Credit default swap spreads .................................................26 .....n .............129.3 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................18 .....n ..............111.1 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................31 .....n.................0.7 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................13 .....n ...............97.0 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................15 .....n .............114.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................21 .....n...............93.7 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................14 .....n ...............97.0 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ........................................5 .....n.................6.7 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ..............................................2 .....n.................6.3 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................41 .....n.................3.7 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets ...............................................5 .....n.................0.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................14 .....n.................2.7 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................49 .....n.................0.0 Argentina ...........................100.0
4.14 Public credit registry coverage ................................................2 .....n...............56.5 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................23 .....n.................0.9 China ...................................22.0
5.02 IPO proceeds amount ...........................................................24 .....n.................0.3 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................21 .....n .................1.0 China....................................12.6
 Belgium

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................19 .....n .................1.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................19 .....n .................7.0 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................27 .....n.................0.6 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................12 .....n.................5.4 Ireland..................................15.6
5.08 Non–life insurance density ...................................................13 .....n.................3.2 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................38 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................26 .....n.................0.6 India.....................................55.4
5.11 Non–life insurance coverage .................................................34 .....n.................0.3 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................37 .....n.................0.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................17 .....n.................2.3 United States.......................10.8
5.14 Share of total number of securitization deals .......................29 .....n.................0.2 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover.............................................13 .....n .................1.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................11 .....n .................1.7 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover...........................................13 .....n .................1.2 United Kingdom ..................40.8

Derivatives markets
85
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................14 .....n.................0.5 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................12 .....n .................1.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options..............................5 .....n .................1.5 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......15 .....n.................0.9 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................14 .....n.................0.6 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................17 .....n .............108.8 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................29 .....n...............88.2 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................23 .....n...............78.2 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ..................n/a .........................n/a Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ..............9 .....n...............58.2 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP ...............3 .....n ...............61.7 Japan .................................184.6
6.15 Private international bonds to GDP .........................................6 .....n...............84.8 Ireland................................215.3
6.16 Public international bonds to GDP ..........................................2 .....n...............29.4 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................17 .....n .................1.5 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication..............................................17 .....n.................5.9 Switzerland ............................6.6
7.02 Venture capital availability......................................................18 .....n.................3.3 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................45 .....n.................2.5 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................44 .....n.................3.6 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................13 .....n.................3.9 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP...........................................4 .....n ...............12.7 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts .....................................2 .....n......396,895.4 Japan............................717,241.6
7.08 Commercial bank branches .....................................................3 .....n...............48.5 Ireland ..................................57.3
7.09 Total number of ATMs.............................................................5 .....n .............138.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices .........................15 .....n ..........1,193.4 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
2: Country/Economy Profiles

Brazil
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .....................................................191.5 20.1% US$ bn
GDP (US$ billions), 2009 ......................................................1,574.0 32.6%
n Public debt securities .......958.4
GDP (current prices) per capita, 2009 ..............................8,220.4 n Private debt securities......520.2
GDP (PPP) as share (%) of world total, 2009 ........................2.87 n Banking deposits ...............870.8
Compound annual growth rate of real GDP (%), 2005–09 ..2.97 n Equity securities ................589.4
29.6%
Total 2,938.8
17.7%

Total/GDP 179.7%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................32 3.5

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................44 3.6

Financial sector liberalization ....................................................44 3.3
Corporate governance.................................................................35 4.3
Legal and regulatory issues .......................................................45 3.1
Contract enforcement..................................................................45 3.7
2nd pillar: Business environment .............................................49 3.8
Human capital ...............................................................................43 3.7
86
Taxes...............................................................................................52 3.6
Infrastructure ................................................................................40 3.6
Cost of doing business ................................................................46 4.3
3rd pillar: Financial stability......................................................10 5.1
Currency stability............................................................................2 6.1
Banking system stability..............................................................16 5.1
Risk of sovereign debt crisis ......................................................42 4.2
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................38 3.2

Size index .......................................................................................28 2.8
Efficiency index.............................................................................53 3.2
Financial information disclosure................................................12 3.9
5th pillar: Non-banking financial services .............................12 3.6
IPO activity.......................................................................................2 5.6
M&A activity..................................................................................23 2.7
Insurance .......................................................................................16 3.4
Securitization.................................................................................25 2.5
6th pillar: Financial markets......................................................34 1.9
Foreign exchange markets .........................................................32 1.1
Derivatives markets .....................................................................26 1.7
Equity market development ........................................................31 2.2
Bond market development..........................................................24 2.4
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................27 3.4

Commercial access......................................................................25 3.6
Retail access.................................................................................19 3.2
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Brazil

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................40 .....n.................0.7 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......49 .....n .................7.6 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................30 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................27 .....n.................4.3 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................33 .....n.................4.5 Sweden .................................5.9
1.06 Reliance on professional management .................................31 .....n.................4.7 Sweden .................................6.5
1.07 Willingness to delegate.........................................................31 .....n.................3.9 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................37 .....n.................4.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................47 .....n.................3.5 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................35 .....n.................4.4 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................57 .....n .................1.9 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................43 .....n.................2.7 Switzerland ............................5.6
1.13 Regulation of securities exchanges.........................................5 .....n.................5.7 South Africa...........................6.0
1.14 Property rights.......................................................................39 .....n.................4.3 Switzerland ............................6.4
1.15 Intellectual property protection .............................................45 .....n.................3.1 Sweden .................................6.2
1.16 Diversion of public funds.......................................................52 .....n.................2.3 Sweden .................................6.5
1.17 Public trust of politicians .......................................................52 .....n .................1.8 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................37 .....n.................3.7 Denmark................................9.3
1.19 Strength of legal rights index ................................................50 .....n.................3.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................23 .....n.................9.0 Sweden ...............................15.0 87
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................52 .....n.................2.4 Singapore ..............................6.5
1.22 Judicial independence ...........................................................40 .....n.................3.5 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................39 .....n.................3.8 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................44 .....n .............616.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................52 .....n...............45.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................35 .....n.................5.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts ...................................................12 .....n ...............16.5 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................43 .....n.................4.1 Switzerland ............................6.1
2.02 Quality of math and science education.................................53 .....n.................2.7 Singapore ..............................6.5
2.03 Extent of staff training...........................................................32 .....n.................4.2 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................27 .....n.................4.7 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................33 .....n.................3.9 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................43 .....n...............30.0 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................39 .....n.................4.2 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......41 .....n.................3.9 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................14 .....n................–7.3 China..................................–24.6
2.10 Time to pay taxes..................................................................57 .....n...........2600.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................43 .....n.................3.8 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................22 .....n.................6.5 Norway...................................7.0
2.13 Internet users .......................................................................31 .....n ...............37.5 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................37 .....n.................5.3 Sweden................................41.2
2.15 Telephone lines......................................................................37 .....n ...............21.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................45 .....n...............78.5 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................31 .....n.................6.9 Denmark................................0.0

(Cont’d.)
2: Country/Economy Profiles

Brazil
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................24 .....n.................2.7 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................29 .....n ...............12.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................56 .....n .............120.0 Australia.................................2.0
2.21 Time to register property ......................................................35 .....n...............42.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................43 .....n.................4.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .......................3 .....n.................9.9 Venezuela ............................14.5
3.02 External vulnerability indicator.................................................6 .....n...............22.8 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................34 .....n ...............–1.1 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .......................2 .....n ...............15.4 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................46 .....n.................2.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles.............................9 .....n.................6.3 Ireland....................................6.8
3.10 Financial Stress Index............................................................10 .....n .................1.4 Thailand ...............................–0.2
3.11 Tier 1 capital ratio....................................................................9 .....n ...............12.4 Jordan..................................16.8
88 3.12 Output loss during banking crises.........................................40 .....n...............62.3 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................35 .....n ...............13.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................36 .....n................11.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................36 .....n.................4.8 Panama..................................6.0
3.16 Manageability of public debt ................................................44 .....n...............62.8 Chile ......................................6.1
3.17 Credit default swap spreads .................................................31 .....n .............136.5 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................28 .....n...............83.2 Denmark ............................219.5
4.02 Central bank assets to GDP ....................................................2 .....n ...............13.3 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................29 .....n...............60.0 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................51 .....n ...............37.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................34 .....n...............54.5 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................33 .....n...............60.7 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................20 .....n.................0.1 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................37 .....n.................3.9 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................55 .....n ...............10.4 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................49 .....n...............38.1 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................50 .....n.................4.0 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................22 .....n.................4.5 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................21 .....n...............59.2 Argentina ...........................100.0
4.14 Public credit registry coverage ................................................8 .....n...............23.7 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ....................................................................3 .....n ...............10.5 China ...................................22.0
5.02 IPO proceeds amount .............................................................2 .....n .................1.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................10 .....n.................2.5 China....................................12.6
 Brazil

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................13 .....n .................1.8 United States ......................36.0
5.05 M&A transaction value to GDP .............................................30 .....n.................4.0 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................20 .....n .................1.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................31 .....n .................1.6 Ireland..................................15.6
5.08 Non–life insurance density ...................................................39 .....n .................1.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................13 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage.........................................................10 .....n.................3.0 India.....................................55.4
5.11 Non–life insurance coverage ...................................................6 .....n.................2.9 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................14 .....n .................1.8 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................41 .....n.................0.8 United States.......................10.8
5.14 Share of total number of securitization deals........................13 .....n .................1.2 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................21 .....n.................0.4 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................35 .....n.................0.1 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................42 .....n.................0.0 United Kingdom ..................40.8

Derivatives markets
89
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................30 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................31 .....n.................0.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......16 .....n.................0.7 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................34 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................32 .....n...............50.3 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................21 .....n .............113.4 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................41 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............18 .....n...............24.4 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............12 .....n...............44.5 Japan .................................184.6
6.15 Private international bonds to GDP .......................................34 .....n.................5.1 Ireland................................215.3
6.16 Public international bonds to GDP ........................................27 .....n.................3.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................34 .....n.................0.2 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................13 .....n.................6.0 Switzerland ............................6.6
7.02 Venture capital availability......................................................39 .....n.................2.6 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................10 .....n.................3.9 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................31 .....n.................3.9 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................39 .....n.................2.8 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................39 .....n.................2.9 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................21 .....n ......106,535.4 Japan............................717,241.6
7.08 Commercial bank branches ...................................................32 .....n ...............12.7 Ireland ..................................57.3
7.09 Total number of ATMs.............................................................9 .....n .............112.1 Canada...............................218.5
7.10 Total number of point of sale (POS) devices .........................11 .....n ..........2,247.4 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................18 .....n .................1.6 Bangladesh ..........................41.2
2: Country/Economy Profiles

Canada
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................33.7 22.5% 21.9% US$ bn
GDP (US$ billions), 2009 ......................................................1,336.4
n Public debt securities .......975.2
GDP (current prices) per capita, 2009 ............................39,668.6 n Private debt securities......863.6
GDP (PPP) as share (%) of world total, 2009 ........................1.85 n Banking deposits ............1,609.6
Compound annual growth rate of real GDP (%), 2005–09 ..0.61 19.4% n Equity securities .............1,002.2

Total 4,450.6
36.2%

Total/GDP 296.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index........................................................6 5.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment ...........................................5 5.9

Financial sector liberalization ......................................................1 7.0
Corporate governance...................................................................3 5.7
Legal and regulatory issues .........................................................8 5.2
Contract enforcement..................................................................11 5.6
2nd pillar: Business environment ...............................................7 5.7
Human capital .................................................................................8 5.4
90
Taxes...............................................................................................19 5.2
Infrastructure ................................................................................11 5.7
Cost of doing business ..................................................................3 6.6
3rd pillar: Financial stability......................................................13 5.0
Currency stability..........................................................................37 3.5
Banking system stability................................................................8 5.6
Risk of sovereign debt crisis ......................................................12 5.9
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................11 4.8

Size index .......................................................................................12 3.9
Efficiency index.............................................................................11 6.0
Financial information disclosure..................................................3 4.0
5th pillar: Non-banking financial services ...............................3 4.5
IPO activity.......................................................................................8 3.7
M&A activity....................................................................................3 5.8
Insurance .......................................................................................18 3.3
Securitization...................................................................................5 5.1
6th pillar: Financial markets......................................................12 4.3
Foreign exchange markets .........................................................11 2.3
Derivatives markets .......................................................................6 6.5
Equity market development ........................................................11 4.6
Bond market development..........................................................12 3.8
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access..........................................................6 4.7

Commercial access......................................................................13 4.0
Retail access...................................................................................6 5.4
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Canada

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n...............63.3 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ................................1 .....n.................5.2 Canada...................................5.2
1.05 Efficacy of corporate boards ...................................................3 .....n.................5.7 Sweden .................................5.9
1.06 Reliance on professional management ...................................4 .....n.................6.1 Sweden .................................6.5
1.07 Willingness to delegate...........................................................7 .....n.................5.1 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .........................5 .....n.................6.1 South Africa...........................6.4
1.09 Ethical behavior of firms..........................................................7 .....n.................6.3 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ........................6 .....n.................5.4 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................15 .....n.................3.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ................................5 .....n.................4.6 Switzerland ............................5.6
1.13 Regulation of securities exchanges .......................................16 .....n.................5.2 South Africa...........................6.0
1.14 Property rights.........................................................................9 .....n.................6.1 Switzerland ............................6.4
1.15 Intellectual property protection..............................................10 .....n.................5.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................12 .....n.................5.7 Sweden .................................6.5
1.17 Public trust of politicians .......................................................13 .....n.................4.2 Singapore ..............................6.4
1.18 Corruption perceptions index ..................................................7 .....n.................8.7 Denmark................................9.3
1.19 Strength of legal rights index ................................................30 .....n.................6.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 91
Contract enforcement
1.21 Effectiveness of law-making bodies ........................................7 .....n.................5.1 Singapore ..............................6.5
1.22 Judicial independence .............................................................9 .....n.................6.2 Sweden .................................6.6
1.23 Irregular payments in judicial decisions...................................8 .....n.................6.5 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................37 .....n.............570.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................34 .....n...............36.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................4 .....n.................8.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................23 .....n...............22.3 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools .............................................2 .....n.................6.0 Switzerland ............................6.1
2.02 Quality of math and science education...................................5 .....n.................5.4 Singapore ..............................6.5
2.03 Extent of staff training ...........................................................11 .....n.................5.0 Sweden .................................5.7
2.04 Local availability of specialized research
and training services..............................................................11 .....n.................5.7 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................15 .....n.................4.6 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................17 .....n...............62.4 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ........................................9 .....n.................6.4 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......23 .....n.................4.4 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................27 .....n .................7.0 China..................................–24.6
2.10 Time to pay taxes ..................................................................13 .....n .............119.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................12 .....n.................6.0 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................13 .....n.................6.7 Norway...................................7.0
2.13 Internet users .........................................................................9 .....n...............75.4 Sweden ................................87.8
2.14 Broadband Internet subscribers ..............................................8 .....n...............29.6 Sweden................................41.2
2.15 Telephone lines........................................................................6 .....n...............54.9 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................50 .....n...............66.4 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business .....................................................3 .....n.................0.4 Denmark................................0.0

(Cont’d.)
2: Country/Economy Profiles

Canada
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................16 .....n .................1.8 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................5 .....n.................4.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................5 .....n.................5.0 Australia.................................2.0
2.21 Time to register property ......................................................17 .....n................17.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................3 .....n.................0.8 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................46 .....n ...............–1.7 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................31 .....n ...............–0.4 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies).............................................................7 .....n................–7.8 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator....................................................1 .....n.................9.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................27 .....n.................4.9 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................33 .....n ...............10.1 Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................12 .....n................11.9 Jordan..................................16.8
92 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................18 .....n.................5.4 Panama..................................6.0
3.16 Manageability of public debt ................................................53 .....n...............82.4 Chile ......................................6.1
3.17 Credit default swap spreads ...................................................7 .....n...............43.0 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .......................................8 .....n .............140.7 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................14 .....n.................3.1 Egypt ...................................23.8
4.03 Financial system deposits to GDP ..........................................8 .....n .............114.8 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................25 .....n...............85.5 Hong Kong SAR ................329.5
4.05 Private credit to GDP...............................................................9 .....n .............134.0 United States.....................210.7
4.06 Bank deposits to GDP .............................................................8 .....n .............116.5 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................19 .....n.................0.1 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................30 .....n.................4.3 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................25 .....n.................2.1 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................28 .....n .................1.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ...............................3 .....n .................1.2 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage................................................1 .....n .............100.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share...................................................................11 .....n .................1.5 China ...................................22.0
5.02 IPO proceeds amount ...........................................................34 .....n.................0.2 Kazakhstan.............................1.1
5.03 Share of world IPOs ................................................................3 .....n ...............10.1 China....................................12.6
 Canada

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ..................................................................5 .....n.................4.1 United States ......................36.0
5.05 M&A transaction value to GDP ...............................................8 .....n ...............10.0 Netherlands .........................14.2
5.06 Share of total number of M&A deals ......................................5 .....n.................4.5 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................19 .....n.................3.3 Ireland..................................15.6
5.08 Non–life insurance density .....................................................6 .....n.................4.1 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................25 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage.........................................................16 .....n .................1.1 India.....................................55.4
5.11 Non–life insurance coverage .................................................14 .....n .................1.4 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................25 .....n .................1.1 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP.............................................................11 .....n.................2.8 United States.......................10.8
5.14 Share of total number of securitization deals .........................6 .....n.................2.5 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover.............................................15 .....n .................1.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................15 .....n .................1.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ...........................................11 .....n .................1.9 United Kingdom ..................40.8

Derivatives markets
93
6.04 Interest rate derivatives turnover: Forward rate
agreements .............................................................................7 .....n .................1.8 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................14 .....n.................0.7 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options..............................6 .....n .................1.3 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ........4 .....n.................4.2 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options....................10 .....n .................1.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................25 .....n ...............74.6 Italy....................................348.2
6.10 Stock market capitalization to GDP .........................................6 .....n .............174.4 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................15 .....n .............153.3 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people.....................2 .....n .................1.2 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............17 .....n...............28.5 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP ...............5 .....n...............59.7 Japan .................................184.6
6.15 Private international bonds to GDP .......................................18 .....n...............32.4 Ireland................................215.3
6.16 Public international bonds to GDP.........................................18 .....n.................6.8 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................14 .....n .................1.8 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication ...............................................3 .....n.................6.5 Switzerland ............................6.6
7.02 Venture capital availability......................................................15 .....n.................3.7 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................38 .....n.................2.7 Indonesia ...............................4.3
7.04 Financing through local equity market ....................................6 .....n.................4.7 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................17 .....n.................3.6 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................35 .....n.................3.3 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................16 .....n...............24.1 Ireland ..................................57.3
7.09 Total number of ATMs.............................................................1 .....n.............218.5 Canada...............................218.5
7.10 Total number of point of sale (POS) devices...........................6 .....n..........2,556.0 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
2: Country/Economy Profiles

Chile
Key indicators Financial assets by major type, 2008
3.3%
Population (millions), 2009 .......................................................17.0 16.6% US$ bn
GDP (US$ billions), 2009 .........................................................161.8
n Public debt securities ...........8.8
GDP (current prices) per capita, 2009 ..............................9,525.4 n Private debt securities........44.8
GDP (PPP) as share (%) of world total, 2009 ........................0.35 49.0% n Banking deposits .................84.1
Compound annual growth rate of real GDP (%), 2005–09 ..2.24 n Equity securities ................132.4
31.1%
Total 270.1

Total/GDP 158.2%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................30 3.5

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................27 4.5

Financial sector liberalization ....................................................33 4.2
Corporate governance.................................................................21 4.9
Legal and regulatory issues .......................................................27 3.9
Contract enforcement..................................................................24 4.7
2nd pillar: Business environment .............................................31 4.5
Human capital ...............................................................................26 4.4
94
Taxes...............................................................................................27 4.8
Infrastructure ................................................................................31 4.0
Cost of doing business ................................................................35 4.9
3rd pillar: Financial stability........................................................7 5.4
Currency stability..........................................................................23 4.3
Banking system stability................................................................2 5.9
Risk of sovereign debt crisis ......................................................16 5.8
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................37 3.2

Size index .......................................................................................35 2.2
Efficiency index.............................................................................47 4.1
Financial information disclosure................................................17 3.6
5th pillar: Non-banking financial services .............................43 1.9
IPO activity.....................................................................................50 1.1
M&A activity..................................................................................30 1.9
Insurance .......................................................................................26 2.7
Securitization.................................................................................42 1.7
6th pillar: Financial markets......................................................44 1.7
Foreign exchange markets .........................................................28 1.1
Derivatives markets .....................................................................35 1.0
Equity market development ........................................................32 2.2
Bond market development..........................................................31 2.0
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................23 3.6

Commercial access........................................................................8 4.4
Retail access.................................................................................30 2.8
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Chile

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................29 .....n.................2.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......49 .....n.................8.7 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................27 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................15 .....n.................4.6 Canada...................................5.2
1.05 Efficacy of corporate boards..................................................14 .....n.................5.1 Sweden .................................5.9
1.06 Reliance on professional management .................................20 .....n.................5.1 Sweden .................................6.5
1.07 Willingness to delegate.........................................................41 .....n.................3.6 Sweden .................................6.5
1.08 Strength of auditing and reporting standards........................16 .....n.................5.6 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................16 .....n.................5.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................21 .....n.................4.8 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation..........................................17 .....n.................3.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................47 .....n.................2.5 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................50 .....n.................3.7 South Africa...........................6.0
1.14 Property rights.......................................................................22 .....n.................5.2 Switzerland ............................6.4
1.15 Intellectual property protection .............................................35 .....n.................3.7 Sweden .................................6.2
1.16 Diversion of public funds.......................................................23 .....n.................4.6 Sweden .................................6.5
1.17 Public trust of politicians .......................................................19 .....n.................3.8 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................19 .....n.................6.7 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................29 .....n .................7.5 Sweden ...............................15.0 95
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................26 .....n.................4.0 Singapore ..............................6.5
1.22 Judicial independence ...........................................................17 .....n.................5.4 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................21 .....n.................5.5 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................26 .....n.............480.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................34 .....n...............36.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................21 .....n.................6.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................40 .....n...............28.6 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................12 .....n.................5.3 Switzerland ............................6.1
2.02 Quality of math and science education.................................51 .....n.................2.8 Singapore ..............................6.5
2.03 Extent of staff training...........................................................24 .....n.................4.4 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................25 .....n.................4.9 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ............................9 .....n.................4.9 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................29 .....n...............49.8 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection.......................................17 .....n.................6.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.........5 .....n.................5.4 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................34 .....n ...............13.2 China..................................–24.6
2.10 Time to pay taxes..................................................................38 .....n .............316.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................18 .....n.................5.7 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................10 .....n.................6.8 Norway...................................7.0
2.13 Internet users .......................................................................35 .....n...............32.5 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................30 .....n.................8.5 Sweden................................41.2
2.15 Telephone lines......................................................................38 .....n ...............21.0 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................40 .....n...............88.1 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................31 .....n.................6.9 Denmark................................0.0

(Cont’d.)
2: Country/Economy Profiles

Chile
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................14 .....n .................1.3 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................31 .....n ...............15.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................38 .....n ...............27.0 Australia.................................2.0
2.21 Time to register property ......................................................27 .....n ...............31.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................51 .....n.................4.5 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .......................9 .....n.................4.8 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................28 .....n .............115.2 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................27 .....n .................1.7 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................24 .....n...............45.3 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................20 .....n .................1.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator....................................................6 .....n .................7.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles.............................5 .....n.................6.6 Ireland....................................6.8
3.10 Financial Stress Index............................................................13 .....n.................2.8 Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
96 3.12 Output loss during banking crises.........................................27 .....n ...............16.4 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................17 .....n...............18.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................22 .....n ...............16.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................43 .....n.................4.5 Panama..................................6.0
3.16 Manageability of public debt ..................................................1 .....n.................6.1 Chile ......................................6.1
3.17 Credit default swap spreads .................................................22 .....n .............102.3 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................31 .....n ...............71.9 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................22 .....n .................1.6 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................33 .....n ...............51.7 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................38 .....n...............56.5 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................26 .....n...............86.5 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................36 .....n...............52.1 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................55 .....n.................2.3 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................36 .....n.................3.1 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................40 .....n...............18.5 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................36 .....n.................2.5 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................29 .....n...............33.9 Argentina ...........................100.0
4.14 Public credit registry coverage ................................................6 .....n...............32.9 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................48 .....n.................0.1 China ...................................22.0
5.02 IPO proceeds amount ...........................................................46 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................44 .....n.................0.2 China....................................12.6
 Chile

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................35 .....n.................0.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................22 .....n.................5.1 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................37 .....n.................0.3 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................25 .....n.................2.5 Ireland..................................15.6
5.08 Non–life insurance density ...................................................34 .....n .................1.7 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................11 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................29 .....n.................0.4 India.....................................55.4
5.11 Non–life insurance coverage .................................................37 .....n.................0.3 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................19 .....n .................1.6 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................40 .....n.................0.8 United States.......................10.8
5.14 Share of total number of securitization deals .......................28 .....n.................0.3 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................31 .....n.................0.2 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................21 .....n.................0.4 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................40 .....n.................0.0 United Kingdom ..................40.8

Derivatives markets
97
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................34 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................35 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......31 .....n.................0.1 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................41 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................41 .....n ...............27.2 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................15 .....n .............132.5 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................31 .....n ...............37.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................20 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............22 .....n ...............19.0 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............40 .....n.................9.9 Japan .................................184.6
6.15 Private international bonds to GDP .......................................33 .....n.................5.5 Ireland................................215.3
6.16 Public international bonds to GDP ........................................39 .....n .................1.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................13 .....n .................1.9 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................18 .....n.................5.9 Switzerland ............................6.6
7.02 Venture capital availability......................................................24 .....n.................3.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................27 .....n.................3.2 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................13 .....n.................4.4 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................16 .....n.................3.7 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP...........................................7 .....n ...............10.4 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................31 .....n........72,975.5 Japan............................717,241.6
7.08 Commercial bank branches ...................................................28 .....n ...............14.9 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................20 .....n...............58.7 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................25 .....n.............486.1 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .......................................................................7 .....n ...............15.3 Bangladesh ..........................41.2
2: Country/Economy Profiles

China
Key indicators Financial assets by major type, 2008
6.3%
Population (millions), 2009 ..................................................1,334.7 10.3% US$ bn
25.0%
GDP (US$ billions), 2009 ......................................................4,909.0
n Public debt securities .......705.1
GDP (current prices) per capita, 2009 ..............................3,677.9 n Private debt securities...1,148.3
GDP (PPP) as share (%) of world total, 2009 ......................12.52 n Banking deposits ............6,543.9
Compound annual growth rate of real GDP (%), 2005–09 ..8.48 n Equity securities .............2,793.6

Total 11,191.0
58.5%
Total/GDP 247.6%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................22 4.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................35 4.1

Financial sector liberalization ....................................................43 3.3
Corporate governance.................................................................30 4.4
Legal and regulatory issues .......................................................28 3.9
Contract enforcement..................................................................23 4.8
2nd pillar: Business environment .............................................38 4.3
Human capital ...............................................................................36 4.0
98
Taxes...............................................................................................24 4.9
Infrastructure ................................................................................47 3.2
Cost of doing business ................................................................34 5.0
3rd pillar: Financial stability......................................................17 4.9
Currency stability............................................................................4 5.7
Banking system stability..............................................................50 3.5
Risk of sovereign debt crisis ........................................................7 6.1
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services........................................8 4.9

Size index .....................................................................................n/a n/a
Efficiency index.............................................................................25 5.4
Financial information disclosure..................................................3 4.0
5th pillar: Non-banking financial services ...............................4 4.5
IPO activity.......................................................................................1 6.8
M&A activity....................................................................................6 5.3
Insurance .........................................................................................5 4.4
Securitization.................................................................................45 1.3
6th pillar: Financial markets......................................................30 2.1
Foreign exchange markets .........................................................27 1.2
Derivatives markets....................................................................n/a n/a
Equity market development.......................................................n/a n/a
Bond market development..........................................................21 2.8
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................26 3.4

Commercial access......................................................................34 3.4
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 China

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................49 .....n ...............–1.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......22 .....n...............55.0 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................40 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................16 .....n.................4.5 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................42 .....n.................4.4 Sweden .................................5.9
1.06 Reliance on professional management .................................30 .....n.................4.7 Sweden .................................6.5
1.07 Willingness to delegate.........................................................42 .....n.................3.6 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................36 .....n.................4.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................30 .....n.................4.2 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................36 .....n.................4.4 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation..........................................10 .....n.................4.0 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................15 .....n.................3.9 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................34 .....n.................4.4 South Africa...........................6.0
1.14 Property rights.......................................................................23 .....n.................5.1 Switzerland ............................6.4
1.15 Intellectual property protection .............................................30 .....n.................4.0 Sweden .................................6.2
1.16 Diversion of public funds.......................................................28 .....n.................3.8 Sweden .................................6.5
1.17 Public trust of politicians .......................................................12 .....n.................4.3 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................40 .....n.................3.6 Denmark................................9.3
1.19 Strength of legal rights index ................................................30 .....n.................6.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................39 .....n.................4.5 Sweden ...............................15.0 99
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................18 .....n.................4.4 Singapore ..............................6.5
1.22 Judicial independence ...........................................................34 .....n.................4.0 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................38 .....n.................4.0 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................19 .....n.............406.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................26 .....n...............34.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................39 .....n.................5.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................4 .....n................11.1 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................40 .....n.................4.2 Switzerland ............................6.1
2.02 Quality of math and science education.................................18 .....n.................4.7 Singapore ..............................6.5
2.03 Extent of staff training...........................................................33 .....n.................4.1 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................35 .....n.................4.4 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................16 .....n.................4.6 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................47 .....n...............22.9 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................41 .....n.................4.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition .......15 .....n.................4.6 Singapore ..............................5.8
2.09 Marginal tax variation ..............................................................1 .....n .............–24.6 China..................................–24.6
2.10 Time to pay taxes..................................................................49 .....n.............504.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................39 .....n.................4.1 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................36 .....n.................6.1 Norway...................................7.0
2.13 Internet users .......................................................................46 .....n...............22.3 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................35 .....n.................6.2 Sweden................................41.2
2.15 Telephone lines......................................................................30 .....n...............25.5 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................54 .....n...............48.0 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................22 .....n.................4.9 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

China
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................29 .....n.................3.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................47 .....n...............22.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................49 .....n ...............37.0 Australia.................................2.0
2.21 Time to register property ......................................................26 .....n...............29.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................20 .....n .................1.7 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................13 .....n.................3.2 Venezuela ............................14.5
3.02 External vulnerability indicator.................................................2 .....n ...............12.4 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP.............................................9 .....n.................8.7 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a ...n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .......................1 .....n.................9.4 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................27 .....n .................1.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................48 .....n.................2.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................44 .....n .................1.0 Ireland....................................6.8
3.10 Financial Stress Index .............................................................3 .....n.................0.1 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................42 .....n.................6.6 Jordan..................................16.8
100 3.12 Output loss during banking crises.........................................28 .....n...............29.1 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................24 .....n ...............16.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................22 .....n ...............16.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ......................................3 .....n.................5.9 Panama..................................6.0
3.16 Manageability of public debt ..................................................6 .....n ...............16.9 Chile ......................................6.1
3.17 Credit default swap spreads..................................................17 .....n...............90.0 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP ....................................n/a .........................n/a Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP .......................................n/a .........................n/a Hong Kong SAR ................285.2
4.04 M2 to GDP ..............................................................................2 .....n.............182.0 Hong Kong SAR ................329.5
4.05 Private credit to GDP ............................................................n/a .........................n/a United States.....................210.7
4.06 Bank deposits to GDP .............................................................4 .....n .............144.8 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................25 .....n.................4.5 Netherlands ...........................6.5
4.09 Bank overhead costs ...............................................................3 .....n .................1.0 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................51 .....n...............52.2 Austria ...................................0.0
4.11 Bank operating costs to assets ...............................................2 .....n.................0.7 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ...............................7 .....n .................1.6 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................49 .....n.................0.0 Argentina ...........................100.0
4.14 Public credit registry coverage ................................................1 .....n...............62.1 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ....................................................................1 .....n...............22.0 China ...................................22.0
5.02 IPO proceeds amount .............................................................4 .....n.................0.8 Kazakhstan.............................1.1
5.03 Share of world IPOs ................................................................1 .....n ...............12.6 China....................................12.6
 China

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ..................................................................6 .....n.................3.9 United States ......................36.0
5.05 M&A transaction value to GDP .............................................36 .....n.................3.2 Netherlands .........................14.2
5.06 Share of total number of M&A deals ......................................3 .....n.................8.6 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................28 .....n.................2.2 Ireland..................................15.6
5.08 Non–life insurance density ...................................................44 .....n .................1.1 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums .............................1 .....n.................0.3 China .....................................0.3
5.10 Life insurance coverage ..........................................................2 .....n...............29.7 India.....................................55.4
5.11 Non–life insurance coverage ...................................................1 .....n ...............14.6 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................48 .....n.................0.5 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................55 .....n.................0.1 United States.......................10.8
5.14 Share of total number of securitization deals .......................23 .....n.................0.4 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover.............................................17 .....n.................0.7 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................41 .....n.................0.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................37 .....n.................0.0 United Kingdom ..................40.8

Derivatives markets
101
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ..................................................n/a .........................n/a Italy....................................348.2
6.10 Stock market capitalization to GDP ......................................n/a .........................n/a Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................49 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............20 .....n ...............19.4 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............25 .....n...............29.3 Japan .................................184.6
6.15 Private international bonds to GDP .......................................48 .....n.................0.9 Ireland................................215.3
6.16 Public international bonds to GDP ........................................48 .....n.................0.1 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ....................5 .....n.................3.1 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................46 .....n.................4.2 Switzerland ............................6.6
7.02 Venture capital availability......................................................19 .....n.................3.3 Hong Kong SAR ....................4.4
7.03 Ease of access to credit..........................................................2 .....n.................4.3 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................36 .....n.................3.8 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................33 .....n.................3.0 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................44 .....n.................2.2 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................51 .....n.................0.0 Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................26 .....n.................0.2 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Colombia
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................45.0 US$ bn
GDP (US$ billions), 2009 .........................................................228.8
37.1% n Public debt securities .......103.1
GDP (current prices) per capita, 2009 ..............................5,087.4 44.0% n Private debt securities..........6.9
GDP (PPP) as share (%) of world total, 2009 ........................0.58 n Banking deposits .................37.5
Compound annual growth rate of real GDP (%), 2005–09 ..3.35 n Equity securities ..................87.0

Total 234.5
16.0% 2.9%
Total/GDP 97.6%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................47 3.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................47 3.5

Financial sector liberalization ....................................................40 3.6
Corporate governance.................................................................44 4.1
Legal and regulatory issues .......................................................46 3.1
Contract enforcement..................................................................51 3.3
2nd pillar: Business environment .............................................36 4.3
Human capital ...............................................................................44 3.7
102
Taxes...............................................................................................34 4.5
Infrastructure ................................................................................42 3.5
Cost of doing business ................................................................19 5.6
3rd pillar: Financial stability......................................................34 4.4
Currency stability..........................................................................10 5.1
Banking system stability..............................................................41 4.0
Risk of sovereign debt crisis ......................................................40 4.4
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................49 2.6

Size index .......................................................................................49 1.2
Efficiency index.............................................................................48 4.0
Financial information disclosure................................................27 2.8
5th pillar: Non-banking financial services .............................37 2.1
IPO activity.....................................................................................23 2.2
M&A activity..................................................................................41 1.5
Insurance .......................................................................................33 2.6
Securitization.................................................................................34 2.0
6th pillar: Financial markets......................................................54 1.4
Foreign exchange markets .........................................................39 1.0
Derivatives markets .....................................................................37 1.0
Equity market development ........................................................51 1.2
Bond market development..........................................................37 1.9
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................47 2.8

Commercial access......................................................................38 3.3
Retail access.................................................................................34 2.3
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Colombia

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................38 .....n .................1.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......44 .....n...............33.6 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................34 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................52 .....n.................3.6 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................29 .....n.................4.7 Sweden .................................5.9
1.06 Reliance on professional management .................................43 .....n.................4.2 Sweden .................................6.5
1.07 Willingness to delegate.........................................................35 .....n.................3.9 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................45 .....n.................4.3 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................34 .....n.................3.9 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................46 .....n.................4.0 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................50 .....n.................2.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................29 .....n.................3.1 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................53 .....n.................3.5 South Africa...........................6.0
1.14 Property rights.......................................................................47 .....n.................3.8 Switzerland ............................6.4
1.15 Intellectual property protection .............................................46 .....n.................3.0 Sweden .................................6.2
1.16 Diversion of public funds.......................................................48 .....n.................2.6 Sweden .................................6.5
1.17 Public trust of politicians .......................................................42 .....n.................2.2 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................37 .....n.................3.7 Denmark................................9.3
1.19 Strength of legal rights index ................................................37 .....n.................5.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................29 .....n .................7.5 Sweden ...............................15.0 103
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................48 .....n.................2.8 Singapore ..............................6.5
1.22 Judicial independence ...........................................................41 .....n.................3.5 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................44 .....n.................3.3 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................55 .....n ...........1346.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................26 .....n...............34.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................4 .....n.................8.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................55 .....n...............52.6 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................36 .....n.................4.3 Switzerland ............................6.1
2.02 Quality of math and science education.................................42 .....n.................3.5 Singapore ..............................6.5
2.03 Extent of staff training...........................................................51 .....n.................3.6 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................43 .....n.................4.1 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................45 .....n.................3.5 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................37 .....n...............35.4 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................44 .....n.................4.0 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......49 .....n.................3.6 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................21 .....n ...............–0.9 China..................................–24.6
2.10 Time to pay taxes..................................................................26 .....n.............208.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................48 .....n.................3.6 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................34 .....n.................6.2 Norway...................................7.0
2.13 Internet users .......................................................................30 .....n...............38.5 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................41 .....n.................4.2 Sweden................................41.2
2.15 Telephone lines......................................................................42 .....n................17.9 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................37 .....n ...............91.9 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................41 .....n ...............12.8 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Colombia
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................17 .....n.................2.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................1 .....n .................1.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................32 .....n...............20.0 Australia.................................2.0
2.21 Time to register property ......................................................21 .....n...............20.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................36 .....n.................3.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................15 .....n.................2.8 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................16 .....n...............43.6 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................40 .....n ...............–2.5 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .......................9 .....n...............23.2 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................46 .....n.................2.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................32 .....n.................4.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles.............................8 .....n.................6.3 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................26 .....n.................5.9 Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
104 3.12 Output loss during banking crises.........................................49 .....n .............100.3 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................35 .....n ...............13.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................43 .....n ...............10.3 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................37 .....n.................4.8 Panama..................................6.0
3.16 Manageability of public debt ................................................27 .....n...............46.2 Chile ......................................6.1
3.17 Credit default swap spreads .................................................32 .....n .............145.8 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................43 .....n ...............47.5 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................35 .....n.................0.4 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................51 .....n ...............21.0 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................52 .....n...............36.0 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................37 .....n...............43.0 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................54 .....n ...............21.0 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................41 .....n.................3.6 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................51 .....n.................5.3 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................54 .....n.................5.7 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................23 .....n.................4.6 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................20 .....n...............60.5 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................28 .....n.................0.7 China ...................................22.0
5.02 IPO proceeds amount ...........................................................13 .....n.................0.5 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................48 .....n.................0.1 China....................................12.6
 Colombia

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................39 .....n.................0.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................38 .....n.................2.9 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................42 .....n.................0.2 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................39 .....n.................0.7 Ireland..................................15.6
5.08 Non–life insurance density ...................................................38 .....n .................1.6 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums .............................5 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................33 .....n.................0.3 India.....................................55.4
5.11 Non–life insurance coverage .................................................24 .....n.................0.7 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................28 .....n .................1.1 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................33 .....n .................1.1 United States.......................10.8
5.14 Share of total number of securitization deals .......................26 .....n.................0.3 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................37 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................31 .....n.................0.1 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................41 .....n.................0.0 United Kingdom ..................40.8

Derivatives markets
105
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................30 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................38 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......35 .....n.................0.0 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................39 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................47 .....n.................5.5 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................36 .....n...............56.1 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................41 .....n.................4.4 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................46 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............37 .....n.................0.4 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............30 .....n...............25.1 Japan .................................184.6
6.15 Private international bonds to GDP .......................................44 .....n.................2.1 Ireland................................215.3
6.16 Public international bonds to GDP.........................................14 .....n .................7.5 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................26 .....n.................0.6 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................42 .....n.................4.5 Switzerland ............................6.6
7.02 Venture capital availability......................................................42 .....n.................2.5 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................20 .....n.................3.4 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................45 .....n.................3.5 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................38 .....n.................2.9 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................22 .....n.................4.6 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................18 .....n ......126,743.7 Japan............................717,241.6
7.08 Commercial bank branches ...................................................30 .....n ...............14.3 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................38 .....n...............29.6 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................26 .....n .............441.1 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................12 .....n.................6.5 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Czech Republic
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................10.5 17.6% US$ bn
21.1%
GDP (US$ billions), 2009 .........................................................194.8
n Public debt securities .........58.6
GDP (current prices) per capita, 2009 ............................18,557.1 n Private debt securities........35.3
GDP (PPP) as share (%) of world total, 2009 ........................0.37 12.8%
n Banking deposits ...............134.2
Compound annual growth rate of real GDP (%), 2005–09 ..2.14 n Equity securities ..................48.9

Total 277.0
48.5%

Total/GDP 128.2%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................33 3.5

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................33 4.2

Financial sector liberalization ....................................................30 4.5
Corporate governance.................................................................26 4.5
Legal and regulatory issues .......................................................32 3.6
Contract enforcement..................................................................35 4.2
2nd pillar: Business environment .............................................28 4.7
Human capital ...............................................................................20 4.6
106
Taxes...............................................................................................26 4.8
Infrastructure ................................................................................24 4.9
Cost of doing business ................................................................45 4.4
3rd pillar: Financial stability......................................................22 4.8
Currency stability..........................................................................24 4.3
Banking system stability..............................................................25 4.7
Risk of sovereign debt crisis ......................................................24 5.4
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................29 3.9

Size index .......................................................................................34 2.2
Efficiency index.............................................................................17 5.7
Financial information disclosure................................................19 3.4
5th pillar: Non-banking financial services .............................44 1.7
IPO activity.....................................................................................24 2.1
M&A activity..................................................................................39 1.6
Insurance .......................................................................................43 2.1
Securitization.................................................................................53 1.1
6th pillar: Financial markets......................................................46 1.6
Foreign exchange markets .........................................................31 1.1
Derivatives markets .....................................................................33 1.2
Equity market development ........................................................45 1.6
Bond market development..........................................................25 2.3
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................30 3.3

Commercial access......................................................................28 3.6
Retail access.................................................................................24 3.0
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Czech Republic

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................28 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......29 .....n...............53.4 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................44 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................23 .....n.................4.4 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................23 .....n.................4.8 Sweden .................................5.9
1.06 Reliance on professional management .................................22 .....n.................5.0 Sweden .................................6.5
1.07 Willingness to delegate.........................................................20 .....n.................4.3 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................29 .....n.................5.1 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................43 .....n.................3.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................45 .....n.................4.0 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................44 .....n.................2.7 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................10 .....n.................4.3 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................30 .....n.................4.6 South Africa...........................6.0
1.14 Property rights.......................................................................36 .....n.................4.4 Switzerland ............................6.4
1.15 Intellectual property protection .............................................32 .....n.................3.9 Sweden .................................6.2
1.16 Diversion of public funds.......................................................47 .....n.................2.7 Sweden .................................6.5
1.17 Public trust of politicians .......................................................49 .....n .................1.9 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................28 .....n.................4.9 Denmark................................9.3
1.19 Strength of legal rights index ................................................30 .....n.................6.0 Multiple (3)...........................10.0
1.20 Central bank transparency....................................................n/a .........................n/a Sweden ...............................15.0 107
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................40 .....n.................3.1 Singapore ..............................6.5
1.22 Judicial independence ...........................................................33 .....n.................4.0 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................37 .....n.................4.0 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................42 .....n..............611.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................7 .....n ...............27.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................39 .....n.................5.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................48 .....n...............33.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................33 .....n.................4.4 Switzerland ............................6.1
2.02 Quality of math and science education.................................13 .....n.................4.9 Singapore ..............................6.5
2.03 Extent of staff training...........................................................27 .....n.................4.4 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................16 .....n.................5.4 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................32 .....n.................3.9 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................26 .....n...............54.8 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................32 .....n.................5.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......32 .....n.................4.1 Singapore ..............................5.8
2.09 Marginal tax variation ..............................................................2 .....n .............–19.5 China..................................–24.6
2.10 Time to pay taxes..................................................................52 .....n .............613.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................25 .....n.................5.1 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................25 .....n.................6.5 Norway...................................7.0
2.13 Internet users .......................................................................23 .....n...............58.4 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................24 .....n................17.1 Sweden................................41.2
2.15 Telephone lines......................................................................36 .....n ...............21.9 Switzerland ..........................64.1
2.16 Mobile telephone subscribers.................................................8 .....n .............133.5 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................36 .....n.................9.2 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Czech Republic
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................26 .....n.................3.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................31 .....n ...............15.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................27 .....n ...............15.0 Australia.................................2.0
2.21 Time to register property ......................................................49 .....n...............78.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................56 .....n.................6.5 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................10 .....n.................4.3 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................23 .....n ...............76.2 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................39 .....n ...............–2.4 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................25 .....n...............45.5 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................27 .....n .................1.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................36 .....n.................4.1 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................31 .....n.................8.8 Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
108 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................24 .....n ...............16.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................26 .....n ...............15.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................34 .....n.................4.9 Panama..................................6.0
3.16 Manageability of public debt ................................................16 .....n...............33.1 Chile ......................................6.1
3.17 Credit default swap spreads .................................................20 .....n .............100.0 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................37 .....n...............60.9 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................28 .....n ...............61.5 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................31 .....n ...............71.3 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................35 .....n...............48.4 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................31 .....n ...............61.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator.............................................17 .....n.................4.7 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................20 .....n.................2.1 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................29 .....n .................1.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................26 .....n.................5.3 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................17 .....n...............73.1 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................17 .....n.................4.9 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................30 .....n.................0.6 China ...................................22.0
5.02 IPO proceeds amount ...........................................................15 .....n.................0.5 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................46 .....n.................0.2 China....................................12.6
 Czech Republic

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................38 .....n.................0.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................35 .....n.................3.4 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................33 .....n.................0.3 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................30 .....n .................1.6 Ireland..................................15.6
5.08 Non–life insurance density ...................................................22 .....n.................2.2 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................36 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................40 .....n.................0.2 India.....................................55.4
5.11 Non–life insurance coverage .................................................41 .....n.................0.2 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................33 .....n.................0.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................52 .....n.................0.2 United States.......................10.8
5.14 Share of total number of securitization deals .......................50 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................35 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................24 .....n.................0.2 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................31 .....n.................0.1 United Kingdom ..................40.8

Derivatives markets
109
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................22 .....n.................0.1 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................28 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................28 .....n.................0.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......35 .....n.................0.0 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................32 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................33 .....n...............48.7 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................43 .....n...............44.2 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................33 .....n ...............27.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................37 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............28 .....n................11.5 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP..............10 .....n...............46.0 Japan .................................184.6
6.15 Private international bonds to GDP .......................................35 .....n.................4.8 Ireland................................215.3
6.16 Public international bonds to GDP ........................................23 .....n.................4.5 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................33 .....n.................0.2 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................34 .....n.................4.7 Switzerland ............................6.6
7.02 Venture capital availability......................................................41 .....n.................2.6 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................17 .....n.................3.5 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................27 .....n.................4.0 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................31 .....n.................3.1 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP .........................................17 .....n.................5.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................14 .....n ......173,925.7 Japan............................717,241.6
7.08 Commercial bank branches ...................................................17 .....n...............22.2 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................34 .....n...............39.9 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................18 .....n.............869.0 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Denmark
Key indicators Financial assets by major type, 2008
10.6% 9.4%
Population (millions), 2009 .........................................................5.5 US$ bn
GDP (US$ billions), 2009 .........................................................309.3
n Public debt securities .......116.5
GDP (current prices) per capita, 2009 ............................56,115.3 21.5% n Private debt securities......722.1
GDP (PPP) as share (%) of world total, 2009 ........................0.29 n Banking deposits ...............266.3
Compound annual growth rate of real GDP (%), 2005–09–0.21 n Equity securities ................131.5

Total 1,236.4
58.4%

Total/GDP 362.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................16 4.3

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment ...........................................4 5.9

Financial sector liberalization ......................................................1 7.0
Corporate governance...................................................................6 5.6
Legal and regulatory issues .........................................................6 5.4
Contract enforcement..................................................................12 5.6
2nd pillar: Business environment ...............................................6 5.8
Human capital .................................................................................5 5.5
110
Taxes...............................................................................................28 4.8
Infrastructure ..................................................................................2 6.4
Cost of doing business ..................................................................5 6.5
3rd pillar: Financial stability......................................................26 4.7
Currency stability..........................................................................29 3.9
Banking system stability..............................................................36 4.2
Risk of sovereign debt crisis ......................................................10 6.0
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................19 4.2

Size index .........................................................................................9 4.0
Efficiency index.............................................................................13 5.9
Financial information disclosure................................................52 1.2
5th pillar: Non-banking financial services .............................30 2.3
IPO activity.....................................................................................49 1.1
M&A activity..................................................................................32 1.9
Insurance .......................................................................................19 3.2
Securitization.................................................................................18 3.0
6th pillar: Financial markets......................................................16 3.8
Foreign exchange markets .........................................................10 3.0
Derivatives markets .......................................................................9 5.4
Equity market development ........................................................23 3.0
Bond market development..........................................................10 4.0
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................25 3.5

Commercial access......................................................................30 3.5
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Denmark

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n...............73.5 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................19 .....n.................4.5 Canada...................................5.2
1.05 Efficacy of corporate boards ...................................................9 .....n.................5.2 Sweden .................................5.9
1.06 Reliance on professional management .................................10 .....n.................5.8 Sweden .................................6.5
1.07 Willingness to delegate...........................................................3 .....n.................5.8 Sweden .................................6.5
1.08 Strength of auditing and reporting standards ........................11 .....n.................5.7 South Africa...........................6.4
1.09 Ethical behavior of firms..........................................................4 .....n.................6.5 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ........................7 .....n.................5.4 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation..........................................11 .....n.................3.8 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................16 .....n.................3.8 Switzerland ............................5.6
1.13 Regulation of securities exchanges .......................................11 .....n.................5.3 South Africa...........................6.0
1.14 Property rights .......................................................................10 .....n.................6.0 Switzerland ............................6.4
1.15 Intellectual property protection ...............................................9 .....n.................5.7 Sweden .................................6.2
1.16 Diversion of public funds.........................................................3 .....n.................6.4 Sweden .................................6.5
1.17 Public trust of politicians .........................................................6 .....n.................5.4 Singapore ..............................6.4
1.18 Corruption perceptions index ..................................................1 .....n.................9.3 Denmark................................9.3
1.19 Strength of legal rights index ..................................................4 .....n.................9.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................29 .....n .................7.5 Sweden ...............................15.0 111
Contract enforcement
1.21 Effectiveness of law-making bodies ........................................5 .....n.................5.4 Singapore ..............................6.5
1.22 Judicial independence .............................................................2 .....n.................6.4 Sweden .................................6.6
1.23 Irregular payments in judicial decisions...................................4 .....n.................6.6 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................12 .....n.............380.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................26 .....n...............34.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................18 .....n.................6.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................25 .....n...............23.3 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................11 .....n.................5.4 Switzerland ............................6.1
2.02 Quality of math and science education .................................10 .....n.................5.1 Singapore ..............................6.5
2.03 Extent of staff training.............................................................6 .....n.................5.4 Sweden .................................5.7
2.04 Local availability of specialized research
and training services ...............................................................8 .....n.................5.8 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................18 .....n.................4.6 Switzerland ............................5.7
2.06 Tertiary enrollment ..................................................................4 .....n...............80.3 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ........................................4 .....n.................6.6 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.........9 .....n.................4.9 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................42 .....n...............22.8 China..................................–24.6
2.10 Time to pay taxes ..................................................................16 .....n .............135.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure ...............................................9 .....n.................6.3 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................11 .....n.................6.7 Norway...................................7.0
2.13 Internet users .........................................................................3 .....n...............83.9 Sweden ................................87.8
2.14 Broadband Internet subscribers ..............................................2 .....n ...............37.1 Sweden................................41.2
2.15 Telephone lines ......................................................................11 .....n...............45.6 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................14 .....n .............125.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business .....................................................1 .....n.................0.0 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Denmark
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ....................................................9 .....n.................0.6 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................5 .....n.................4.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................7 .....n.................6.0 Australia.................................2.0
2.21 Time to register property ......................................................35 .....n...............42.0 Multiple (3) ............................2.0
2.22 Time to close a business.......................................................11 .....n .................1.1 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................33 .....n.................0.6 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................22 .....n.................2.6 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies).............................................................8 .....n ...............–8.4 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................26 .....n.................4.9 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................30 .....n.................8.5 Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................14 .....n................11.6 Jordan..................................16.8
112 3.12 Output loss during banking crises.........................................43 .....n...............72.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................42 .....n.................4.5 Panama..................................6.0
3.16 Manageability of public debt ................................................24 .....n ...............41.6 Chile ......................................6.1
3.17 Credit default swap spreads ...................................................4 .....n ...............41.4 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .......................................1 .....n .............219.5 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................36 .....n.................0.4 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................25 .....n ...............67.0 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................29 .....n...............73.6 Hong Kong SAR ................329.5
4.05 Private credit to GDP...............................................................2 .....n.............209.8 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................26 .....n ...............67.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ........................................8 .....n.................4.7 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................32 .....n.................4.2 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................30 .....n.................2.5 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets ...............................................4 .....n.................0.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................46 .....n.................5.2 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................47 .....n.................0.1 China ...................................22.0
5.02 IPO proceeds amount ...........................................................50 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................29 .....n.................0.4 China....................................12.6
 Denmark

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................29 .....n.................0.3 United States ......................36.0
5.05 M&A transaction value to GDP .............................................31 .....n.................3.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................23 .....n.................0.7 United States ......................23.0
Insurance
5.07 Life insurance density .............................................................9 .....n.................6.8 Ireland..................................15.6
5.08 Non–life insurance density ...................................................10 .....n.................3.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................28 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................32 .....n.................0.4 India.....................................55.4
5.11 Non–life insurance coverage .................................................42 .....n.................0.2 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................24 .....n .................1.1 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................10 .....n.................2.9 United States.......................10.8
5.14 Share of total number of securitization deals .......................39 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover.............................................12 .....n .................1.2 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ...........................9 .....n.................2.3 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ............................................9 .....n.................2.8 United Kingdom ..................40.8

Derivatives markets
113
6.04 Interest rate derivatives turnover: Forward rate
agreements .............................................................................9 .....n .................1.1 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................16 .....n.................0.3 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options ............................11 .....n.................0.5 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ........9 .....n .................1.9 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................15 .....n.................0.6 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................18 .....n...............99.0 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................28 .....n ...............91.7 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................19 .....n...............98.8 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ..................n/a .........................n/a Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ..............1 .....n .............175.7 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............24 .....n...............29.8 Japan .................................184.6
6.15 Private international bonds to GDP .......................................15 .....n...............44.7 Ireland................................215.3
6.16 Public international bonds to GDP ........................................20 .....n.................6.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................20 .....n.................5.7 Switzerland ............................6.6
7.02 Venture capital availability......................................................21 .....n.................3.3 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................51 .....n.................2.1 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................40 .....n.................3.7 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................19 .....n.................3.5 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................32 .....n.................3.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches .....................................................4 .....n...............45.4 Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Egypt
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................76.7 US$ bn
24.1%
GDP (US$ billions), 2009 .........................................................188.0
n Public debt securities .......142.8
GDP (current prices) per capita, 2009 ..............................2,450.4 40.0%
n Private debt securities..........3.6
GDP (PPP) as share (%) of world total, 2009 ........................0.68 n Banking deposits ...............124.8
Compound annual growth rate of real GDP (%), 2005–09 ..5.12 n Equity securities ..................85.9

Total 357.0
35.0% 1.0%

Total/GDP 219.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................38 3.2

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................38 3.8

Financial sector liberalization ....................................................32 4.4
Corporate governance.................................................................37 4.3
Legal and regulatory issues .......................................................48 3.1
Contract enforcement..................................................................44 3.7
2nd pillar: Business environment .............................................48 3.8
Human capital ...............................................................................54 3.3
114
Taxes...............................................................................................38 4.4
Infrastructure ................................................................................50 2.9
Cost of doing business ................................................................40 4.7
3rd pillar: Financial stability......................................................35 4.4
Currency stability..........................................................................18 4.6
Banking system stability..............................................................11 5.3
Risk of sovereign debt crisis ......................................................52 3.0
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................42 3.0

Size index .......................................................................................20 3.2
Efficiency index.............................................................................51 3.7
Financial information disclosure................................................47 1.4
5th pillar: Non-banking financial services .............................33 2.1
IPO activity.....................................................................................37 1.6
M&A activity..................................................................................26 2.3
Insurance .......................................................................................37 2.4
Securitization.................................................................................31 2.2
6th pillar: Financial markets......................................................38 1.9
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................39 1.9
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................21 3.6

Commercial access......................................................................26 3.6
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Egypt

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................27 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......36 .....n...............39.7 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................43 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................41 .....n.................4.0 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................40 .....n.................4.4 Sweden .................................5.9
1.06 Reliance on professional management .................................46 .....n.................4.1 Sweden .................................6.5
1.07 Willingness to delegate.........................................................36 .....n.................3.7 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................33 .....n.................4.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................33 .....n.................4.1 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................28 .....n.................4.6 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................27 .....n.................3.1 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................52 .....n.................2.1 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................36 .....n.................4.3 South Africa...........................6.0
1.14 Property rights.......................................................................32 .....n.................4.6 Switzerland ............................6.4
1.15 Intellectual property protection .............................................39 .....n.................3.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................40 .....n.................3.1 Sweden .................................6.5
1.17 Public trust of politicians .......................................................22 .....n.................3.6 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................47 .....n.................2.8 Denmark................................9.3
1.19 Strength of legal rights index ................................................50 .....n.................3.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................45 .....n.................2.5 Sweden ...............................15.0 115
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................28 .....n.................3.8 Singapore ..............................6.5
1.22 Judicial independence ...........................................................35 .....n.................3.9 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................28 .....n.................5.0 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................53 .....n ..........1,010.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................48 .....n ...............41.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................35 .....n.................5.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................34 .....n...............26.2 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................57 .....n.................3.3 Switzerland ............................6.1
2.02 Quality of math and science education.................................52 .....n.................2.7 Singapore ..............................6.5
2.03 Extent of staff training...........................................................54 .....n.................3.3 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................42 .....n.................4.1 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................54 .....n.................3.2 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................39 .....n...............34.7 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................40 .....n.................4.2 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......24 .....n.................4.4 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................16 .....n ...............–5.6 China..................................–24.6
2.10 Time to pay taxes..................................................................47 .....n.............480.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................35 .....n.................4.3 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................18 .....n.................6.6 Norway...................................7.0
2.13 Internet users .......................................................................48 .....n ...............16.7 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................51 .....n.................0.9 Sweden................................41.2
2.15 Telephone lines......................................................................46 .....n ...............14.6 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................52 .....n...............50.6 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................46 .....n ...............16.1 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Egypt
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................10 .....n.................0.9 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................47 .....n...............22.0 Multiple (4).............................1.0
2.20 Time to start a business ........................................................11 .....n .................7.0 Australia.................................2.0
2.21 Time to register property ......................................................47 .....n...............72.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................48 .....n.................4.2 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .......................8 .....n.................5.4 Venezuela ............................14.5
3.02 External vulnerability indicator.................................................3 .....n ...............15.2 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................29 .....n.................0.0 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................40 .....n...............62.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .......................3 .....n ...............16.8 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises ..................................................11 .....n.................0.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................41 .....n.................3.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ...........................16 .....n.................5.7 Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
116 3.12 Output loss during banking crises.........................................22 .....n.................0.4 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................41 .....n................11.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................44 .....n ...............10.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................51 .....n.................3.5 Panama..................................6.0
3.16 Manageability of public debt ................................................52 .....n...............80.9 Chile ......................................6.1
3.17 Credit default swap spreads .................................................41 .....n..............211.9 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................36 .....n...............62.4 Denmark ............................219.5
4.02 Central bank assets to GDP ....................................................1 .....n...............23.8 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................21 .....n ...............76.5 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................26 .....n...............82.2 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................39 .....n ...............41.0 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................23 .....n ...............76.4 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator.............................................13 .....n.................4.8 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................33 .....n.................2.8 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................55 .....n...............62.3 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................23 .....n .................1.6 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................38 .....n ...............14.7 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................43 .....n.................8.2 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................18 .....n.................2.5 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................38 .....n.................0.3 China ...................................22.0
5.02 IPO proceeds amount ...........................................................26 .....n.................0.3 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................51 .....n.................0.1 China....................................12.6
 Egypt

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................30 .....n.................0.3 United States ......................36.0
5.05 M&A transaction value to GDP .............................................17 .....n .................7.3 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................45 .....n.................0.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................45 .....n.................0.4 Ireland..................................15.6
5.08 Non–life insurance density ...................................................52 .....n.................0.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums .............................9 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................35 .....n.................0.3 India.....................................55.4
5.11 Non–life insurance coverage .................................................33 .....n.................0.4 China....................................14.6
5.12 Relative value-added of insurance to GDP ..............................9 .....n.................2.2 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................19 .....n .................1.8 United States.......................10.8
5.14 Share of total number of securitization deals .......................42 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
117
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................40 .....n...............29.0 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................25 .....n..............101.7 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................30 .....n...............39.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................35 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................47 .....n .................1.8 Ireland................................215.3
6.16 Public international bonds to GDP ........................................35 .....n .................1.8 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................50 .....n.................3.9 Switzerland ............................6.6
7.02 Venture capital availability......................................................28 .....n.................3.0 Hong Kong SAR ....................4.4
7.03 Ease of access to credit..........................................................5 .....n.................4.1 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................19 .....n.................4.2 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................32 .....n.................3.0 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................18 .....n.................5.1 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ..................................................n/a .........................n/a Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................11 .....n .................7.2 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Finland
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .........................................................5.4 17.4% US$ bn
28.4%
GDP (US$ billions), 2009 .........................................................238.1
n Public debt securities .........94.6
GDP (current prices) per capita, 2009 ............................44,491.5 n Private debt securities......147.2
GDP (PPP) as share (%) of world total, 2009 ........................0.26 n Banking deposits ...............147.8
Compound annual growth rate of real GDP (%), 2005–09 ..0.45 27.1% n Equity securities ................154.4

Total 543.9
27.2%

Total/GDP 200.7%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................20 4.1

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment ...........................................7 5.8

Financial sector liberalization ....................................................23 6.0
Corporate governance...................................................................4 5.7
Legal and regulatory issues .........................................................4 5.5
Contract enforcement....................................................................5 5.9
2nd pillar: Business environment ...............................................4 5.9
Human capital .................................................................................1 5.7
118
Taxes...............................................................................................12 5.5
Infrastructure ..................................................................................6 6.0
Cost of doing business ..................................................................7 6.2
3rd pillar: Financial stability......................................................12 5.1
Currency stability..........................................................................28 3.9
Banking system stability..............................................................14 5.2
Risk of sovereign debt crisis ........................................................9 6.1
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................24 4.1

Size index .......................................................................................25 3.0
Efficiency index...............................................................................2 6.5
Financial information disclosure................................................44 1.4
5th pillar: Non-banking financial services .............................35 2.1
IPO activity.....................................................................................48 1.1
M&A activity..................................................................................31 1.9
Insurance .......................................................................................29 2.7
Securitization.................................................................................21 2.8
6th pillar: Financial markets......................................................20 3.3
Foreign exchange markets .........................................................29 1.1
Derivatives markets .....................................................................24 1.9
Equity market development ..........................................................7 5.2
Bond market development..........................................................13 3.8
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................51 2.6

Commercial access......................................................................18 3.8
Retail access.................................................................................46 1.3
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Finland

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......31 .....n...............29.9 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................29 .....n.................4.3 Canada...................................5.2
1.05 Efficacy of corporate boards ...................................................7 .....n.................5.5 Sweden .................................5.9
1.06 Reliance on professional management ...................................3 .....n.................6.1 Sweden .................................6.5
1.07 Willingness to delegate...........................................................6 .....n.................5.2 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .........................4 .....n.................6.2 South Africa...........................6.4
1.09 Ethical behavior of firms..........................................................2 .....n.................6.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ........................2 .....n.................5.9 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation ...........................................3 .....n.................4.3 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................12 .....n.................4.1 Switzerland ............................5.6
1.13 Regulation of securities exchanges.........................................6 .....n.................5.6 South Africa...........................6.0
1.14 Property rights.........................................................................2 .....n.................6.4 Switzerland ............................6.4
1.15 Intellectual property protection ...............................................2 .....n.................6.2 Sweden .................................6.2
1.16 Diversion of public funds.........................................................4 .....n.................6.3 Sweden .................................6.5
1.17 Public trust of politicians .........................................................8 .....n.................5.1 Singapore ..............................6.4
1.18 Corruption perceptions index ..................................................5 .....n.................8.9 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 119
Contract enforcement
1.21 Effectiveness of law-making bodies ........................................4 .....n.................5.5 Singapore ..............................6.5
1.22 Judicial independence .............................................................5 .....n.................6.3 Sweden .................................6.6
1.23 Irregular payments in judicial decisions...................................2 .....n.................6.7 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................11 .....n.............375.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................22 .....n...............32.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................27 .....n.................5.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................3 .....n ...............10.4 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................15 .....n.................5.3 Switzerland ............................6.1
2.02 Quality of math and science education...................................3 .....n.................6.2 Singapore ..............................6.5
2.03 Extent of staff training.............................................................8 .....n.................5.2 Sweden .................................5.7
2.04 Local availability of specialized research
and training services ...............................................................7 .....n.................5.8 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................14 .....n.................4.6 Switzerland ............................5.7
2.06 Tertiary enrollment ..................................................................2 .....n...............93.8 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ........................................3 .....n.................6.7 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition .......11 .....n.................4.9 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................18 .....n ...............–3.6 China..................................–24.6
2.10 Time to pay taxes..................................................................30 .....n.............243.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure ...............................................7 .....n.................6.4 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .........................................5 .....n.................6.9 Norway...................................7.0
2.13 Internet users .........................................................................4 .....n...............82.6 Sweden ................................87.8
2.14 Broadband Internet subscribers ..............................................7 .....n...............30.5 Sweden................................41.2
2.15 Telephone lines......................................................................25 .....n ...............31.1 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................10 .....n .............128.8 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business....................................................10 .....n.................0.9 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Finland
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................31 .....n.................4.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................5 .....n.................4.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................25 .....n ...............14.0 Australia.................................2.0
2.21 Time to register property ......................................................12 .....n ...............14.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................5 .....n.................0.9 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................33 .....n.................0.6 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................20 .....n.................2.9 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies).............................................................6 .....n ...............–6.7 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................20 .....n .................1.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator....................................................5 .....n.................8.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................29 .....n.................4.8 Ireland....................................6.8
3.10 Financial Stress Index .............................................................6 .....n.................0.5 Thailand ...............................–0.2
3.11 Tier 1 capital ratio....................................................................8 .....n ...............12.5 Jordan..................................16.8
120 3.12 Output loss during banking crises.........................................48 .....n ...............87.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................38 .....n.................4.7 Panama..................................6.0
3.16 Manageability of public debt ................................................25 .....n...............44.4 Chile ......................................6.1
3.17 Credit default swap spreads ...................................................2 .....n...............33.2 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................26 .....n...............83.7 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................35 .....n...............50.6 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................32 .....n...............70.8 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................28 .....n...............80.5 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................37 .....n...............50.7 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ........................................6 .....n.................6.6 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator.............................................12 .....n.................5.0 Netherlands ...........................6.5
4.09 Bank overhead costs ...............................................................4 .....n .................1.0 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................11 .....n .................1.1 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................37 .....n ...............14.7 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................45 .....n.................0.2 China ...................................22.0
5.02 IPO proceeds amount ...........................................................43 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................48 .....n.................0.1 China....................................12.6
 Finland

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................33 .....n.................0.3 United States ......................36.0
5.05 M&A transaction value to GDP .............................................29 .....n.................4.2 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................29 .....n.................0.5 United States ......................23.0
Insurance
5.07 Life insurance density .............................................................6 .....n .................7.6 Ireland..................................15.6
5.08 Non–life insurance density ...................................................28 .....n.................2.0 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................26 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................30 .....n.................0.4 India.....................................55.4
5.11 Non–life insurance coverage .................................................49 .....n.................0.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................44 .....n.................0.6 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................13 .....n.................2.7 United States.......................10.8
5.14 Share of total number of securitization deals .......................38 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................42 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................33 .....n.................0.1 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................24 .....n.................0.3 United Kingdom ..................40.8

Derivatives markets
121
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................25 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................22 .....n.................0.1 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................13 .....n.................0.3 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......28 .....n.................0.1 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................27 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................10 .....n .............162.2 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................11 .....n .............148.8 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP..........................................4 .....n.............299.4 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ..................n/a .........................n/a Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............15 .....n...............29.3 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............39 .....n................11.1 Japan .................................184.6
6.15 Private international bonds to GDP .......................................20 .....n...............28.4 Ireland................................215.3
6.16 Public international bonds to GDP ..........................................5 .....n...............24.1 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ....................8 .....n.................2.8 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication..............................................11 .....n.................6.1 Switzerland ............................6.6
7.02 Venture capital availability........................................................4 .....n.................4.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................24 .....n.................3.3 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................33 .....n.................3.9 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ..........................................................3 .....n.................4.5 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................56 .....n ...............–1.8 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................51 .....n.................0.0 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................35 .....n...............38.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................33 .....n...............64.3 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

France
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................62.6 16.9%
21.9% US$ bn
GDP (US$ billions), 2009 ......................................................2,675.9
n Public debt securities ....1,935.8
GDP (current prices) per capita, 2009 ............................42,747.2 n Private debt securities...3,425.4
GDP (PPP) as share (%) of world total, 2009 ........................3.03 n Banking deposits ............1,969.3
22.3%
Compound annual growth rate of real GDP (%), 2005–09 ..0.55 n Equity securities .............1,492.3

Total 8,822.7
38.8%

Total/GDP 307.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................11 4.6

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................17 5.5

Financial sector liberalization ......................................................1 7.0
Corporate governance.................................................................23 4.9
Legal and regulatory issues .......................................................15 4.7
Contract enforcement..................................................................15 5.4
2nd pillar: Business environment .............................................10 5.6
Human capital ...............................................................................12 5.1
122
Taxes.................................................................................................6 6.0
Infrastructure ..................................................................................7 5.9
Cost of doing business ................................................................27 5.2
3rd pillar: Financial stability......................................................11 5.1
Currency stability........................................................................n/a n/a
Banking system stability..............................................................27 4.6
Risk of sovereign debt crisis ......................................................13 5.9
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................23 4.1

Size index .......................................................................................23 3.1
Efficiency index.............................................................................16 5.8
Financial information disclosure................................................29 2.6
5th pillar: Non-banking financial services .............................15 3.4
IPO activity.....................................................................................29 1.9
M&A activity..................................................................................11 4.2
Insurance .......................................................................................11 3.6
Securitization.................................................................................10 3.9
6th pillar: Financial markets........................................................7 4.6
Foreign exchange markets ...........................................................9 3.5
Derivatives markets .......................................................................1 7.0
Equity market development ........................................................20 3.4
Bond market development............................................................6 4.9
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................14 4.2

Commercial access......................................................................17 3.8
Retail access.................................................................................10 4.6
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 France

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n .................1.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n...............72.4 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................18 .....n.................4.5 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................21 .....n.................5.0 Sweden .................................5.9
1.06 Reliance on professional management .................................21 .....n.................5.1 Sweden .................................6.5
1.07 Willingness to delegate.........................................................33 .....n.................3.9 Sweden .................................6.5
1.08 Strength of auditing and reporting standards........................18 .....n.................5.5 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................14 .....n.................5.7 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................25 .....n.................4.7 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................48 .....n.................2.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................35 .....n.................2.9 Switzerland ............................5.6
1.13 Regulation of securities exchanges .......................................13 .....n.................5.2 South Africa...........................6.0
1.14 Property rights .......................................................................14 .....n.................5.8 Switzerland ............................6.4
1.15 Intellectual property protection ...............................................5 .....n.................5.9 Sweden .................................6.2
1.16 Diversion of public funds.......................................................17 .....n.................5.2 Sweden .................................6.5
1.17 Public trust of politicians........................................................17 .....n.................3.9 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................18 .....n.................6.9 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 123
Contract enforcement
1.21 Effectiveness of law-making bodies ........................................9 .....n.................5.0 Singapore ..............................6.5
1.22 Judicial independence ...........................................................24 .....n.................4.8 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................20 .....n.................5.8 Sweden .................................6.8
1.24 Time to enforce a contract ......................................................8 .....n .............331.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................9 .....n...............29.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................35 .....n.................5.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts ...................................................16 .....n................17.4 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools .............................................4 .....n.................5.7 Switzerland ............................6.1
2.02 Quality of math and science education...................................6 .....n.................5.4 Singapore ..............................6.5
2.03 Extent of staff training...........................................................23 .....n.................4.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services ...............................................................5 .....n.................5.9 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................28 .....n.................4.0 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................25 .....n...............55.6 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................20 .....n.................6.0 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......18 .....n.................4.5 Singapore ..............................5.8
2.09 Marginal tax variation ..............................................................5 .....n ..............–17.3 China..................................–24.6
2.10 Time to pay taxes ..................................................................15 .....n .............132.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure ...............................................4 .....n.................6.6 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................12 .....n.................6.7 Norway...................................7.0
2.13 Internet users .......................................................................17 .....n...............68.2 Sweden ................................87.8
2.14 Broadband Internet subscribers ..............................................9 .....n...............28.5 Sweden................................41.2
2.15 Telephone lines........................................................................5 .....n...............56.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................35 .....n...............93.5 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business....................................................10 .....n.................0.9 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

France
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................44 .....n.................6.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................20 .....n.................9.0 Multiple (4).............................1.0
2.20 Time to start a business ........................................................11 .....n .................7.0 Australia.................................2.0
2.21 Time to register property ......................................................53 .....n...............98.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................24 .....n .................1.9 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................27 .....n .................1.0 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................35 .....n ...............–1.6 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator....................................................6 .....n .................7.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................38 .....n.................4.0 Ireland....................................6.8
3.10 Financial Stress Index ............................................................11 .....n .................1.6 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................30 .....n.................8.9 Jordan..................................16.8
124 3.12 Output loss during banking crises.........................................34 .....n...............42.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................17 .....n.................5.5 Panama..................................6.0
3.16 Manageability of public debt ................................................50 .....n ...............77.0 Chile ......................................6.1
3.17 Credit default swap spreads..................................................15 .....n...............86.3 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................14 .....n .............121.3 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................28 .....n.................0.9 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................23 .....n...............68.3 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................24 .....n...............86.2 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................14 .....n .............106.7 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................25 .....n...............68.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................12 .....n.................2.5 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................33 .....n.................4.2 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................32 .....n.................2.7 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets ...............................................9 .....n .................1.1 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................49 .....n.................0.0 Argentina ...........................100.0
4.14 Public credit registry coverage ................................................7 .....n...............32.5 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................14 .....n .................1.2 China ...................................22.0
5.02 IPO proceeds amount ...........................................................47 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................11 .....n.................2.2 China....................................12.6
 France

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ..................................................................7 .....n.................3.6 United States ......................36.0
5.05 M&A transaction value to GDP .............................................26 .....n.................4.6 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................10 .....n.................3.1 United States ......................23.0
Insurance
5.07 Life insurance density .............................................................7 .....n .................7.3 Ireland..................................15.6
5.08 Non–life insurance density ...................................................11 .....n.................3.3 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................45 .....n ...............–0.1 China .....................................0.3
5.10 Life insurance coverage ..........................................................7 .....n.................4.5 India.....................................55.4
5.11 Non–life insurance coverage ...................................................9 .....n.................2.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................34 .....n.................0.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................23 .....n .................1.7 United States.......................10.8
5.14 Share of total number of securitization deals .........................8 .....n .................1.9 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ..............................................9 .....n.................2.0 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................10 .....n .................1.8 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ............................................8 .....n.................4.0 United Kingdom ..................40.8

Derivatives markets
125
6.04 Interest rate derivatives turnover: Forward rate
agreements .............................................................................4 .....n.................5.6 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps................................3 .....n.................9.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options..............................4 .....n.................6.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ........5 .....n.................3.6 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options .....................7 .....n.................2.2 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................12 .....n .............146.6 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................22 .....n .............112.3 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................13 .....n .............159.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................21 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............10 .....n...............54.4 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP ...............6 .....n...............58.5 Japan .................................184.6
6.15 Private international bonds to GDP .........................................9 .....n ...............67.4 Ireland................................215.3
6.16 Public international bonds to GDP ........................................33 .....n .................1.9 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ....................3 .....n.................3.4 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication ...............................................7 .....n.................6.2 Switzerland ............................6.6
7.02 Venture capital availability......................................................23 .....n.................3.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................50 .....n.................2.3 Indonesia ...............................4.3
7.04 Financing through local equity market ....................................4 .....n.................4.8 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................22 .....n.................3.4 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................25 .....n.................4.4 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................29 .....n.........77,198.7 Japan............................717,241.6
7.08 Commercial bank branches .....................................................5 .....n...............43.2 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................10 .....n .............105.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices...........................7 .....n..........2,456.9 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Germany
Key indicators Financial assets by major type, 2008
9.8%
Population (millions), 2009 .......................................................82.0 21.6% US$ bn
GDP (US$ billions), 2009 ......................................................3,352.7
n Public debt securities ....2,426.1
GDP (current prices) per capita, 2009 ............................40,874.6 n Private debt securities...3,895.9
GDP (PPP) as share (%) of world total, 2009 ........................4.03 n Banking deposits ............3,822.4
34.0% n Equity securities .............1,108.0
Compound annual growth rate of real GDP (%), 2005–09 ..0.35
34.6% Total 11,252.3

Total/GDP 306.3%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................13 4.5

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment ...........................................8 5.8

Financial sector liberalization ......................................................1 7.0
Corporate governance.................................................................11 5.4
Legal and regulatory issues .......................................................11 5.1
Contract enforcement....................................................................8 5.6
2nd pillar: Business environment .............................................12 5.5
Human capital ...............................................................................17 4.9
126
Taxes...............................................................................................16 5.3
Infrastructure ..................................................................................4 6.3
Cost of doing business ................................................................20 5.6
3rd pillar: Financial stability......................................................24 4.7
Currency stability..........................................................................21 4.3
Banking system stability..............................................................35 4.2
Risk of sovereign debt crisis ......................................................15 5.8
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................17 4.3

Size index .......................................................................................15 3.8
Efficiency index.............................................................................32 5.0
Financial information disclosure................................................11 4.0
5th pillar: Non-banking financial services .............................14 3.4
IPO activity.....................................................................................20 2.3
M&A activity....................................................................................8 4.7
Insurance .......................................................................................14 3.5
Securitization.................................................................................17 3.3
6th pillar: Financial markets......................................................10 4.3
Foreign exchange markets ...........................................................8 4.1
Derivatives markets .......................................................................8 6.1
Equity market development ........................................................24 3.0
Bond market development............................................................9 4.6
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................29 3.3

Commercial access......................................................................45 3.2
Retail access.................................................................................16 3.5
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Germany

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n...............73.5 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ................................9 .....n.................4.8 Canada...................................5.2
1.05 Efficacy of corporate boards ..................................................11 .....n.................5.2 Sweden .................................5.9
1.06 Reliance on professional management .................................12 .....n.................5.7 Sweden .................................6.5
1.07 Willingness to delegate...........................................................9 .....n.................5.0 Sweden .................................6.5
1.08 Strength of auditing and reporting standards........................13 .....n.................5.6 South Africa...........................6.4
1.09 Ethical behavior of firms ........................................................11 .....n.................6.0 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ........................8 .....n.................5.2 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................33 .....n.................3.0 Singapore ..............................5.5
1.12 Centralization of economic policymaking ................................4 .....n.................4.8 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................22 .....n.................4.9 South Africa...........................6.0
1.14 Property rights.........................................................................7 .....n.................6.1 Switzerland ............................6.4
1.15 Intellectual property protection ...............................................6 .....n.................5.7 Sweden .................................6.2
1.16 Diversion of public funds .......................................................11 .....n.................5.7 Sweden .................................6.5
1.17 Public trust of politicians .......................................................16 .....n.................4.0 Singapore ..............................6.4
1.18 Corruption perceptions index.................................................11 .....n.................8.0 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 127
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................11 .....n.................5.0 Singapore ..............................6.5
1.22 Judicial independence .............................................................4 .....n.................6.4 Sweden .................................6.6
1.23 Irregular payments in judicial decisions...................................9 .....n.................6.4 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................14 .....n.............394.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract ........................11 .....n...............30.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................39 .....n.................5.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................9 .....n ...............14.4 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................22 .....n.................4.9 Switzerland ............................6.1
2.02 Quality of math and science education.................................22 .....n.................4.7 Singapore ..............................6.5
2.03 Extent of staff training.............................................................7 .....n.................5.2 Sweden .................................5.7
2.04 Local availability of specialized research
and training services ...............................................................2 .....n.................6.2 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................22 .....n.................4.2 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................33 .....n...............43.6 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................13 .....n.................6.3 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......48 .....n.................3.7 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................15 .....n................-6.2 China..................................–24.6
2.10 Time to pay taxes..................................................................23 .....n .............196.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure ...............................................8 .....n.................6.3 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................20 .....n.................6.5 Norway...................................7.0
2.13 Internet users .......................................................................11 .....n...............75.3 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................13 .....n ...............27.5 Sweden................................41.2
2.15 Telephone lines........................................................................2 .....n...............62.5 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................11 .....n .............128.3 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................20 .....n.................4.7 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Germany
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................42 .....n.................5.2 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................17 .....n.................8.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................31 .....n...............18.0 Australia.................................2.0
2.21 Time to register property ......................................................33 .....n...............40.0 Multiple (3) ............................2.0
2.22 Time to close a business.......................................................15 .....n .................1.2 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................37 .....n.................0.4 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................13 .....n.................6.4 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies).............................................................4 .....n ...............27.7 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................18 .....n.................5.4 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................34 .....n ...............10.3 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................23 .....n ...............10.8 Jordan..................................16.8
128 3.12 Output loss during banking crises.........................................31 .....n...............38.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................32 .....n.................4.9 Panama..................................6.0
3.16 Manageability of public debt ................................................49 .....n...............73.3 Chile ......................................6.1
3.17 Credit default swap spreads ...................................................6 .....n...............42.5 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................13 .....n .............121.3 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................38 .....n.................0.2 Egypt ...................................23.8
4.03 Financial system deposits to GDP.........................................11 .....n .............103.6 Hong Kong SAR ................285.2
4.04 M2 to GDP.............................................................................11 .....n .............125.3 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................16 .....n .............102.2 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................12 .....n .............103.6 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................11 .....n.................2.7 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................40 .....n.................3.7 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................49 .....n.................5.0 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................29 .....n .................7.6 Austria ...................................0.0
4.11 Bank operating costs to assets ...............................................3 .....n.................0.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage................................................9 .....n...............98.3 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................23 .....n.................0.8 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ....................................................................8 .....n.................2.4 China ...................................22.0
5.02 IPO proceeds amount ...........................................................41 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................15 .....n .................1.8 China....................................12.6
 Germany

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ..................................................................3 .....n.................4.6 United States ......................36.0
5.05 M&A transaction value to GDP .............................................27 .....n.................4.6 Netherlands .........................14.2
5.06 Share of total number of M&A deals ......................................7 .....n.................3.9 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................18 .....n.................3.3 Ireland..................................15.6
5.08 Non–life insurance density .....................................................9 .....n.................3.8 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................35 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage .........................................................11 .....n.................2.7 India.....................................55.4
5.11 Non–life insurance coverage ...................................................5 .....n.................3.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................46 .....n.................0.6 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................24 .....n .................1.7 United States.......................10.8
5.14 Share of total number of securitization deals .........................9 .....n .................1.4 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover.............................................10 .....n .................1.9 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ...........................5 .....n.................5.3 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover...........................................10 .....n.................2.3 United Kingdom ..................40.8

Derivatives markets
129
6.04 Interest rate derivatives turnover: Forward rate
agreements .............................................................................3 .....n .................7.3 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps................................4 .....n.................4.1 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options..............................8 .....n.................0.7 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......19 .....n.................0.5 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options....................11 .....n .................1.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio .....................................................9 .....n .............169.0 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................33 .....n...............65.0 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................18 .....n .............122.7 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................24 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............13 .....n ...............37.4 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............13 .....n...............43.8 Japan .................................184.6
6.15 Private international bonds to GDP .........................................8 .....n...............79.0 Ireland................................215.3
6.16 Public international bonds to GDP .........................................11 .....n.................8.8 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ....................7 .....n.................3.0 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................15 .....n.................6.0 Switzerland ............................6.6
7.02 Venture capital availability......................................................34 .....n.................2.8 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................49 .....n.................2.4 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................34 .....n.................3.9 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................40 .....n.................2.8 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................50 .....n.................0.7 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................27 .....n ...............15.9 Ireland ..................................57.3
7.09 Total number of ATMs.............................................................8 .....n .............112.2 Canada...............................218.5
7.10 Total number of point of sale (POS) devices .........................19 .....n.............836.5 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Hong Kong SAR

Key indicators Financial assets by major type, 2008
2.3% 8.6%
Population (millions), 2009 .........................................................7.1 US$ bn
GDP (US$ billions), 2009 .........................................................210.7
37.7%
n Public debt securities .........29.2
GDP (current prices) per capita, 2009 ............................29,825.5 n Private debt securities......107.1
GDP (PPP) as share (%) of world total, 2009 ........................0.43 n Banking deposits ...............638.1
Compound annual growth rate of real GDP (%), 2005–09 ..2.51 n Equity securities ................468.6
51.3% Total 1,243.0

Total/GDP 577.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index........................................................3 5.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................10 5.7

Financial sector liberalization ....................................................24 5.9
Corporate governance.................................................................15 5.1
Legal and regulatory issues .........................................................5 5.5
Contract enforcement....................................................................2 6.2
2nd pillar: Business environment ...............................................3 5.9
Human capital ...............................................................................19 4.8
130
Taxes.................................................................................................2 6.4
Infrastructure ..................................................................................1 6.5
Cost of doing business ................................................................14 5.9
3rd pillar: Financial stability........................................................2 5.7
Currency stability............................................................................9 5.3
Banking system stability................................................................6 5.6
Risk of sovereign debt crisis ........................................................3 6.4
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services........................................3 5.3

Size index .........................................................................................6 5.3
Efficiency index...............................................................................5 6.4
Financial information disclosure................................................23 3.2
5th pillar: Non-banking financial services .............................17 3.2
IPO activity.....................................................................................11 3.4
M&A activity..................................................................................14 3.7
Insurance .......................................................................................15 3.4
Securitization.................................................................................30 2.2
6th pillar: Financial markets......................................................11 4.3
Foreign exchange markets ...........................................................6 4.8
Derivatives markets .....................................................................12 5.1
Equity market development ..........................................................4 5.7
Bond market development..........................................................30 2.0
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access..........................................................2 5.1

Commercial access........................................................................1 5.1
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Hong Kong SAR

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......33 .....n...............35.3 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ................................3 .....n.................5.1 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................24 .....n.................4.8 Sweden .................................5.9
1.06 Reliance on professional management .................................24 .....n.................5.0 Sweden .................................6.5
1.07 Willingness to delegate.........................................................26 .....n.................4.1 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .........................7 .....n.................5.9 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................13 .....n.................6.0 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................20 .....n.................4.9 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation ...........................................2 .....n.................5.1 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................17 .....n.................3.7 Switzerland ............................5.6
1.13 Regulation of securities exchanges.........................................9 .....n.................5.4 South Africa...........................6.0
1.14 Property rights.........................................................................4 .....n.................6.3 Switzerland ............................6.4
1.15 Intellectual property protection .............................................15 .....n.................5.4 Sweden .................................6.2
1.16 Diversion of public funds.........................................................6 .....n.................6.0 Sweden .................................6.5
1.17 Public trust of politicians........................................................10 .....n.................4.7 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................10 .....n.................8.2 Denmark................................9.3
1.19 Strength of legal rights index ..................................................1 .....n ...............10.0 Multiple (3)...........................10.0
1.20 Central bank transparency....................................................n/a .........................n/a Sweden ...............................15.0 131
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................22 .....n.................4.2 Singapore ..............................6.5
1.22 Judicial independence ...........................................................13 .....n.................6.1 Sweden .................................6.6
1.23 Irregular payments in judicial decisions...................................6 .....n.................6.5 Sweden .................................6.8
1.24 Time to enforce a contract ......................................................3 .....n.............280.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................3 .....n...............24.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................2 .....n.................9.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................20 .....n ...............19.5 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................19 .....n.................5.1 Switzerland ............................6.1
2.02 Quality of math and science education...................................7 .....n.................5.4 Singapore ..............................6.5
2.03 Extent of staff training...........................................................20 .....n.................4.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................15 .....n.................5.4 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ............................5 .....n.................5.1 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................40 .....n...............33.8 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ........................................7 .....n.................6.5 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.........2 .....n.................5.7 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes....................................................................6 .....n...............80.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure ...............................................2 .....n.................6.7 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .........................................2 .....n.................6.9 Norway...................................7.0
2.13 Internet users .......................................................................18 .....n ...............67.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................11 .....n...............28.1 Sweden................................41.2
2.15 Telephone lines........................................................................3 .....n...............58.7 Switzerland ..........................64.1
2.16 Mobile telephone subscribers.................................................3 .....n .............165.9 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business....................................................13 .....n .................1.8 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Hong Kong SAR

Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................38 .....n.................5.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................20 .....n.................9.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................7 .....n.................6.0 Australia.................................2.0
2.21 Time to register property ......................................................39 .....n...............45.0 Multiple (3) ............................2.0
2.22 Time to close a business.......................................................11 .....n .................1.1 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................48 .....n ...............–2.0 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP.............................................7 .....n ...............12.3 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies).............................................................1 .....n.............353.1 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator....................................................1 .....n.................9.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................42 .....n.................3.0 Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................21 .....n................11.1 Jordan..................................16.8
132 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................15 .....n ...............19.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................15 .....n ...............19.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................11 .....n.................5.7 Panama..................................6.0
3.16 Manageability of public debt ................................................19 .....n ...............37.4 Chile ......................................6.1
3.17 Credit default swap spreads ..................................................11 .....n ...............57.9 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .......................................9 .....n .............140.4 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ..........................................1 .....n.............285.2 Hong Kong SAR ................285.2
4.04 M2 to GDP ..............................................................................1 .....n.............329.5 Hong Kong SAR ................329.5
4.05 Private credit to GDP .............................................................10 .....n .............126.5 United States.....................210.7
4.06 Bank deposits to GDP .............................................................1 .....n.............289.1 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................15 .....n .................1.1 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator.............................................14 .....n.................4.8 Netherlands ...........................6.5
4.09 Bank overhead costs ...............................................................8 .....n .................1.3 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................14 .....n .................1.2 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ...............................5 .....n .................1.5 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................18 .....n ...............71.9 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................20 .....n .................1.0 China ...................................22.0
5.02 IPO proceeds amount .............................................................6 .....n.................0.8 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................15 .....n .................1.8 China....................................12.6
 Hong Kong SAR

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................21 .....n.................0.7 United States ......................36.0
5.05 M&A transaction value to GDP ...............................................4 .....n................11.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................16 .....n .................1.4 United States ......................23.0
Insurance
5.07 Life insurance density .............................................................4 .....n.................9.6 Ireland..................................15.6
5.08 Non–life insurance density ...................................................42 .....n .................1.4 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................44 .....n ...............–0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................24 .....n.................0.7 India.....................................55.4
5.11 Non–life insurance coverage .................................................52 .....n.................0.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ..............................2 .....n.................4.5 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................22 .....n .................1.7 United States.......................10.8
5.14 Share of total number of securitization deals .......................32 .....n.................0.2 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ..............................................7 .....n.................3.0 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ...........................7 .....n.................3.5 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ............................................3 .....n.................5.5 United Kingdom ..................40.8

Derivatives markets
133
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................18 .....n.................0.2 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps ..............................11 .....n .................1.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................17 .....n.................0.2 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......10 .....n .................1.6 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options .....................6 .....n.................2.3 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................22 .....n...............78.9 Italy....................................348.2
6.10 Stock market capitalization to GDP .........................................1 .....n.............603.5 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people.....................1 .....n .................1.3 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............27 .....n ...............14.2 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............33 .....n ...............21.8 Japan .................................184.6
6.15 Private international bonds to GDP .......................................16 .....n...............34.2 Ireland................................215.3
6.16 Public international bonds to GDP ........................................41 .....n.................0.8 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication ...............................................4 .....n.................6.4 Switzerland ............................6.6
7.02 Venture capital availability........................................................1 .....n.................4.4 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................21 .....n.................3.4 Indonesia ...............................4.3
7.04 Financing through local equity market ....................................1 .....n.................5.2 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ..........................................................7 .....n.................4.2 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP...........................................1 .....n...............29.9 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................18 .....n ...............21.2 Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Hungary
Key indicators Financial assets by major type, 2008
8.3%
Population (millions), 2009 .......................................................10.0 US$ bn
GDP (US$ billions), 2009 .........................................................129.4
n Public debt securities .......106.3
GDP (current prices) per capita, 2009 ............................12,926.5 n Private debt securities........24.6
GDP (PPP) as share (%) of world total, 2009 ........................0.27 32.9% 47.7% n Banking deposits .................73.2
Compound annual growth rate of real GDP (%), 2005–09–0.21 n Equity securities ..................18.6

Total 222.8
11.1%
Total/GDP 143.3%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................45 3.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................24 4.6

Financial sector liberalization ....................................................21 6.1
Corporate governance.................................................................41 4.1
Legal and regulatory issues .......................................................31 3.6
Contract enforcement..................................................................27 4.5
2nd pillar: Business environment .............................................25 4.7
Human capital ...............................................................................24 4.5
134
Taxes...............................................................................................35 4.5
Infrastructure ................................................................................23 5.0
Cost of doing business ................................................................30 5.1
3rd pillar: Financial stability......................................................57 2.9
Currency stability..........................................................................51 2.3
Banking system stability..............................................................55 3.3
Risk of sovereign debt crisis ......................................................53 2.9
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................55 2.2

Size index .......................................................................................38 2.0
Efficiency index.............................................................................56 2.9
Financial information disclosure................................................49 1.3
5th pillar: Non-banking financial services .............................50 1.5
IPO activity.....................................................................................53 1.0
M&A activity..................................................................................33 1.9
Insurance .......................................................................................52 1.5
Securitization.................................................................................41 1.7
6th pillar: Financial markets......................................................29 2.2
Foreign exchange markets .........................................................33 1.1
Derivatives markets .....................................................................30 1.3
Equity market development ........................................................35 2.2
Bond market development..........................................................15 3.7
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................37 3.1

Commercial access......................................................................49 2.9
Retail access.................................................................................21 3.2
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Hungary

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n ...............81.3 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................39 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................36 .....n.................4.1 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................34 .....n.................4.5 Sweden .................................5.9
1.06 Reliance on professional management .................................39 .....n.................4.3 Sweden .................................6.5
1.07 Willingness to delegate.........................................................54 .....n.................3.0 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................20 .....n.................5.4 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................50 .....n.................3.3 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................40 .....n.................4.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................55 .....n.................2.2 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................37 .....n.................2.9 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................32 .....n.................4.5 South Africa...........................6.0
1.14 Property rights.......................................................................37 .....n.................4.4 Switzerland ............................6.4
1.15 Intellectual property protection .............................................31 .....n.................4.0 Sweden .................................6.2
1.16 Diversion of public funds.......................................................46 .....n.................2.7 Sweden .................................6.5
1.17 Public trust of politicians .......................................................53 .....n .................1.8 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................24 .....n.................5.1 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 135
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................46 .....n.................2.9 Singapore ..............................6.5
1.22 Judicial independence ...........................................................31 .....n.................4.0 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................30 .....n.................4.5 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................15 .....n.............395.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................24 .....n...............33.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................49 .....n.................4.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................7 .....n ...............13.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................42 .....n.................4.1 Switzerland ............................6.1
2.02 Quality of math and science education.................................16 .....n.................4.8 Singapore ..............................6.5
2.03 Extent of staff training...........................................................45 .....n.................3.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................32 .....n.................4.4 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................37 .....n.................3.9 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................11 .....n...............69.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................35 .....n.................4.9 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......53 .....n.................3.5 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................40 .....n.............330.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................31 .....n.................4.8 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................17 .....n.................6.6 Norway...................................7.0
2.13 Internet users .......................................................................22 .....n...............58.7 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................23 .....n................17.5 Sweden................................41.2
2.15 Telephone lines......................................................................26 .....n...............30.9 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................16 .....n .............122.1 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................35 .....n.................8.0 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Hungary
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................55 .....n................11.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................31 .....n ...............15.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................3 .....n.................4.0 Australia.................................2.0
2.21 Time to register property ......................................................17 .....n................17.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................25 .....n.................2.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................38 .....n.................0.1 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................33 .....n .............201.4 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................47 .....n ...............–4.5 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................30 .....n...............25.2 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................34 .....n .............139.4 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................53 .....n.................3.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................32 .....n.................4.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles.............................6 .....n.................6.6 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................36 .....n ...............12.8 Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
136 3.12 Output loss during banking crises.........................................45 .....n...............84.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................41 .....n................11.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................36 .....n................11.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................52 .....n.................3.4 Panama..................................6.0
3.16 Manageability of public debt ................................................48 .....n ...............71.8 Chile ......................................6.1
3.17 Credit default swap spreads .................................................47 .....n.............332.5 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................30 .....n...............79.7 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................32 .....n.................0.6 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................39 .....n ...............47.2 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................39 .....n...............55.2 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................32 .....n...............64.2 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................40 .....n ...............47.1 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................54 .....n.................2.4 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................56 .....n ...............16.6 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................25 .....n.................3.9 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................56 .....n.................5.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................31 .....n.................5.9 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................41 .....n ...............10.3 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................52 .....n.................0.0 China ...................................22.0
5.02 IPO proceeds amount ...........................................................52 .....n.................0.0 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................53 .....n.................0.0 China....................................12.6
 Hungary

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................37 .....n.................0.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................23 .....n.................4.9 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................41 .....n.................0.2 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................32 .....n .................1.6 Ireland..................................15.6
5.08 Non–life insurance density ...................................................40 .....n .................1.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................46 .....n ...............–0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................41 .....n.................0.2 India.....................................55.4
5.11 Non–life insurance coverage .................................................46 .....n.................0.2 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................49 .....n.................0.5 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................35 .....n .................1.1 United States.......................10.8
5.14 Share of total number of securitization deals .......................40 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................30 .....n.................0.2 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................38 .....n.................0.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................28 .....n.................0.2 United Kingdom ..................40.8

Derivatives markets
137
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................19 .....n.................0.2 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................27 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......37 .....n.................0.0 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................25 .....n.................0.1 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................15 .....n .............136.7 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................45 .....n ...............31.9 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................27 .....n...............44.2 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................34 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............29 .....n.................8.0 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP ...............7 .....n...............54.9 Japan .................................184.6
6.15 Private international bonds to GDP .......................................25 .....n................11.7 Ireland................................215.3
6.16 Public international bonds to GDP ..........................................6 .....n ...............19.4 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................36 .....n.................4.6 Switzerland ............................6.6
7.02 Venture capital availability......................................................53 .....n.................2.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................53 .....n.................2.0 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................54 .....n.................2.6 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................47 .....n.................2.5 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP .........................................19 .....n.................5.0 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts .....................................9 .....n ......205,827.1 Japan............................717,241.6
7.08 Commercial bank branches ...................................................23 .....n...............18.3 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................22 .....n...............55.6 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................20 .....n .............831.3 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

India
Key indicators Financial assets by major type, 2008
Population (millions), 2009 ..................................................1,199.1 US$ bn
GDP (US$ billions), 2009 ......................................................1,236.0 29.7% 30.5%
n Public debt securities .......663.0
GDP (current prices) per capita, 2009 ..............................1,030.8 n Private debt securities......115.1
GDP (PPP) as share (%) of world total, 2009 ........................5.06 n Banking deposits ...............748.6
Compound annual growth rate of real GDP (%), 2005–09 ..6.38 n Equity securities ................645.5
5.3%
Total 2,172.2
34.5%
Total/GDP 180.0%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................37 3.2

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................51 3.2

Financial sector liberalization ....................................................54 1.7
Corporate governance.................................................................31 4.4
Legal and regulatory issues .......................................................34 3.5
Contract enforcement..................................................................52 3.3
2nd pillar: Business environment .............................................52 3.3
Human capital ...............................................................................39 3.9
138
Taxes...............................................................................................49 3.9
Infrastructure ................................................................................56 2.3
Cost of doing business ................................................................52 3.3
3rd pillar: Financial stability......................................................45 4.0
Currency stability..........................................................................15 4.9
Banking system stability..............................................................49 3.5
Risk of sovereign debt crisis ......................................................44 4.0
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................41 3.1

Size index .......................................................................................33 2.4
Efficiency index.............................................................................37 4.6
Financial information disclosure................................................50 1.3
5th pillar: Non-banking financial services .............................13 3.5
IPO activity.......................................................................................4 4.6
M&A activity..................................................................................21 2.8
Insurance .........................................................................................8 4.1
Securitization.................................................................................24 2.6
6th pillar: Financial markets......................................................24 2.8
Foreign exchange markets .........................................................13 2.0
Derivatives markets .....................................................................13 4.9
Equity market development ........................................................26 2.8
Bond market development..........................................................35 1.9
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................49 2.7

Commercial access......................................................................19 3.8
Retail access.................................................................................43 1.7
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 India

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................49 .....n ...............–1.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......49 .....n.................6.2 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................48 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................40 .....n.................4.1 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................37 .....n.................4.5 Sweden .................................5.9
1.06 Reliance on professional management .................................29 .....n.................4.7 Sweden .................................6.5
1.07 Willingness to delegate.........................................................34 .....n.................3.9 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................27 .....n.................5.1 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................36 .....n.................3.9 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................30 .....n.................4.5 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................35 .....n.................3.0 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................22 .....n.................3.6 Switzerland ............................5.6
1.13 Regulation of securities exchanges .......................................12 .....n.................5.3 South Africa...........................6.0
1.14 Property rights.......................................................................34 .....n.................4.5 Switzerland ............................6.4
1.15 Intellectual property protection .............................................38 .....n.................3.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................35 .....n.................3.2 Sweden .................................6.5
1.17 Public trust of politicians .......................................................39 .....n.................2.3 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................41 .....n.................3.4 Denmark................................9.3
1.19 Strength of legal rights index ................................................12 .....n.................8.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................46 .....n.................2.0 Sweden ...............................15.0 139
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................21 .....n.................4.3 Singapore ..............................6.5
1.22 Judicial independence ...........................................................25 .....n.................4.8 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................31 .....n.................4.5 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................56 .....n..........1,420.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................53 .....n...............46.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................21 .....n.................6.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................51 .....n...............39.6 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................18 .....n.................5.1 Switzerland ............................6.1
2.02 Quality of math and science education.................................21 .....n.................4.7 Singapore ..............................6.5
2.03 Extent of staff training...........................................................35 .....n.................4.1 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................36 .....n.................4.4 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................29 .....n.................3.9 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................52 .....n ...............13.5 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................45 .....n.................3.9 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......37 .....n.................4.0 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................36 .....n ...............15.8 China..................................–24.6
2.10 Time to pay taxes..................................................................35 .....n .............271.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................45 .....n.................3.6 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................31 .....n.................6.3 Norway...................................7.0
2.13 Internet users .......................................................................56 .....n.................4.4 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................53 .....n.................0.5 Sweden................................41.2
2.15 Telephone lines......................................................................54 .....n.................3.2 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................56 .....n...............29.4 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................56 .....n...............66.1 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

India
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................50 .....n .................7.4 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................20 .....n.................9.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................42 .....n...............30.0 Australia.................................2.0
2.21 Time to register property ......................................................38 .....n...............44.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................57 .....n .................7.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................40 .....n ...............–0.4 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................15 .....n...............40.1 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................36 .....n ...............–1.8 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................27 .....n.................4.3 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .......................4 .....n ...............19.7 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................20 .....n .................1.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................32 .....n.................4.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................43 .....n .................1.2 Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................40 .....n.................6.8 Jordan..................................16.8
140 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................41 .....n................11.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................36 .....n................11.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................13 .....n.................5.6 Panama..................................6.0
3.16 Manageability of public debt ................................................43 .....n...............62.1 Chile ......................................6.1
3.17 Credit default swap spreads.................................................n/a .........................n/a Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................35 .....n...............65.0 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................17 .....n.................2.1 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................27 .....n...............63.3 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................22 .....n ...............87.7 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................36 .....n ...............47.9 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................30 .....n...............63.2 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................23 .....n.................4.5 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................16 .....n .................1.6 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................56 .....n ...............67.3 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................37 .....n.................2.6 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................12 .....n.................2.4 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................42 .....n ...............10.2 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ....................................................................6 .....n.................3.9 China ...................................22.0
5.02 IPO proceeds amount .............................................................9 .....n.................0.5 Kazakhstan.............................1.1
5.03 Share of world IPOs ................................................................7 .....n.................5.5 China....................................12.6
 India

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................16 .....n .................1.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................34 .....n.................3.5 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................11 .....n.................3.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................15 .....n.................4.6 Ireland..................................15.6
5.08 Non–life insurance density ...................................................50 .....n.................0.6 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................29 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ..........................................................1 .....n...............55.4 India.....................................55.4
5.11 Non–life insurance coverage ...................................................3 .....n .................7.7 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................32 .....n.................0.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................44 .....n.................0.6 United States.......................10.8
5.14 Share of total number of securitization deals........................10 .....n .................1.4 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover.............................................14 .....n .................1.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................12 .....n .................1.5 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover...........................................18 .....n.................0.6 United Kingdom ..................40.8

Derivatives markets
141
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................19 .....n.................0.2 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......12 .....n .................1.3 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options .....................9 .....n .................1.5 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................34 .....n...............45.8 Italy....................................348.2
6.10 Stock market capitalization to GDP .........................................7 .....n .............173.2 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................17 .....n..............127.4 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................32 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............31 .....n.................4.5 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............18 .....n ...............37.0 Japan .................................184.6
6.15 Private international bonds to GDP .......................................38 .....n.................3.4 Ireland................................215.3
6.16 Public international bonds to GDP ........................................51 .....n.................0.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................25 .....n.................0.7 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................26 .....n.................5.2 Switzerland ............................6.6
7.02 Venture capital availability......................................................22 .....n.................3.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................16 .....n.................3.6 Indonesia ...............................4.3
7.04 Financing through local equity market ....................................7 .....n.................4.7 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................24 .....n.................3.3 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................34 .....n.................3.4 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................30 .....n ........74,729.3 Japan............................717,241.6
7.08 Commercial bank branches ...................................................39 .....n ...............10.1 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................45 .....n .................7.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................32 .....n ...............67.1 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................13 .....n.................4.8 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Indonesia
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .....................................................231.5 23.2% US$ bn
GDP (US$ billions), 2009 .........................................................539.4 34.1% n Public debt securities .......144.8
GDP (current prices) per capita, 2009 ..............................2,329.4 n Private debt securities........26.7
GDP (PPP) as share (%) of world total, 2009 ........................1.38 n Banking deposits ...............154.7
Compound annual growth rate of real GDP (%), 2005–09 ..4.45 n Equity securities ..................98.8

6.3% Total 424.9

36.4%

Total/GDP 83.1%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................51 2.9

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................46 3.5

Financial sector liberalization ....................................................48 2.8
Corporate governance.................................................................32 4.3
Legal and regulatory issues .......................................................33 3.6
Contract enforcement..................................................................46 3.5
2nd pillar: Business environment .............................................54 3.2
Human capital ...............................................................................38 4.0
142
Taxes...............................................................................................51 3.7
Infrastructure ................................................................................55 2.5
Cost of doing business ................................................................55 2.7
3rd pillar: Financial stability......................................................36 4.4
Currency stability............................................................................6 5.5
Banking system stability..............................................................48 3.5
Risk of sovereign debt crisis ......................................................39 4.4
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................51 2.6

Size index .......................................................................................43 1.6
Efficiency index.............................................................................49 3.9
Financial information disclosure................................................35 2.1
5th pillar: Non-banking financial services .............................36 2.1
IPO activity.....................................................................................19 2.3
M&A activity..................................................................................38 1.6
Insurance .......................................................................................48 1.9
Securitization.................................................................................28 2.4
6th pillar: Financial markets......................................................52 1.4
Foreign exchange markets .........................................................38 1.1
Derivatives markets .....................................................................32 1.3
Equity market development ........................................................37 2.0
Bond market development..........................................................45 1.3
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................39 3.0

Commercial access......................................................................15 3.9
Retail access.................................................................................36 2.2
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Indonesia

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................39 .....n .................1.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......45 .....n...............29.8 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................52 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................26 .....n.................4.4 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................26 .....n.................4.7 Sweden .................................5.9
1.06 Reliance on professional management .................................34 .....n.................4.5 Sweden .................................6.5
1.07 Willingness to delegate.........................................................25 .....n.................4.1 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................43 .....n.................4.6 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................48 .....n.................3.5 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................29 .....n.................4.6 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................12 .....n.................3.7 Singapore ..............................5.5
1.12 Centralization of economic policymaking ................................7 .....n.................4.4 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................31 .....n.................4.6 South Africa...........................6.0
1.14 Property rights.......................................................................44 .....n.................4.0 Switzerland ............................6.4
1.15 Intellectual property protection .............................................34 .....n.................3.8 Sweden .................................6.2
1.16 Diversion of public funds.......................................................31 .....n.................3.5 Sweden .................................6.5
1.17 Public trust of politicians .......................................................27 .....n.................3.3 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................47 .....n.................2.8 Denmark................................9.3
1.19 Strength of legal rights index ................................................50 .....n.................3.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................25 .....n.................8.0 Sweden ...............................15.0 143
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................32 .....n.................3.6 Singapore ..............................6.5
1.22 Judicial independence ...........................................................38 .....n.................3.8 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................42 .....n.................3.4 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................37 .....n.............570.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................43 .....n...............39.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................21 .....n.................6.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................57 .....n .............122.7 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................32 .....n.................4.4 Switzerland ............................6.1
2.02 Quality of math and science education.................................27 .....n.................4.5 Singapore ..............................6.5
2.03 Extent of staff training...........................................................26 .....n.................4.4 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................37 .....n.................4.4 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................19 .....n.................4.5 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................50 .....n................17.5 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................51 .....n.................3.4 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......26 .....n.................4.2 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................38 .....n................17.4 China..................................–24.6
2.10 Time to pay taxes..................................................................34 .....n.............266.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................44 .....n.................3.7 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................54 .....n.................5.0 Norway...................................7.0
2.13 Internet users .......................................................................54 .....n .................7.9 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................54 .....n.................0.2 Sweden................................41.2
2.15 Telephone lines......................................................................47 .....n ...............13.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................51 .....n ...............61.8 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................52 .....n...............26.0 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Indonesia
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................54 .....n ...............10.7 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................39 .....n...............18.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................55 .....n...............60.0 Australia.................................2.0
2.21 Time to register property ......................................................23 .....n...............22.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................54 .....n.................5.5 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .......................2 .....n................11.6 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................18 .....n...............54.3 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................28 .....n .................1.5 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................29 .....n ...............15.1 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................16 .....n...............32.4 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................27 .....n .................1.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................41 .....n.................3.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ...........................14 .....n.................5.8 Ireland....................................6.8
3.10 Financial Stress Index............................................................18 .....n.................4.2 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................41 .....n.................6.8 Jordan..................................16.8
144 3.12 Output loss during banking crises.........................................51 .....n .............103.5 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................47 .....n ...............10.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................46 .....n.................9.3 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................22 .....n.................5.3 Panama..................................6.0
3.16 Manageability of public debt ................................................14 .....n ...............27.4 Chile ......................................6.1
3.17 Credit default swap spreads .................................................38 .....n .............179.7 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................50 .....n...............30.2 Denmark ............................219.5
4.02 Central bank assets to GDP ....................................................6 .....n.................6.3 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................44 .....n...............33.6 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................50 .....n...............38.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................51 .....n...............22.8 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................46 .....n...............33.7 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................39 .....n.................3.8 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................34 .....n.................2.9 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................52 .....n...............56.5 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................48 .....n.................3.7 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................19 .....n.................3.8 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................49 .....n.................0.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................10 .....n...............22.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................18 .....n .................1.1 China ...................................22.0
5.02 IPO proceeds amount ...........................................................20 .....n.................0.3 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................19 .....n .................1.5 China....................................12.6
 Indonesia

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................27 .....n.................0.4 United States ......................36.0
5.05 M&A transaction value to GDP .............................................39 .....n.................2.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................28 .....n.................0.6 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................36 .....n.................0.9 Ireland..................................15.6
5.08 Non–life insurance density ...................................................54 .....n.................0.4 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................43 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage.........................................................12 .....n.................2.2 India.....................................55.4
5.11 Non–life insurance coverage .................................................20 .....n .................1.0 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................26 .....n .................1.1 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................31 .....n .................1.2 United States.......................10.8
5.14 Share of total number of securitization deals .......................18 .....n.................0.7 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................32 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................30 .....n.................0.1 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................39 .....n.................0.0 United Kingdom ..................40.8

Derivatives markets
145
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................31 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................33 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................29 .....n.................0.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......22 .....n.................0.3 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................28 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................20 .....n...............82.5 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................37 .....n...............55.3 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................44 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............34 .....n .................1.6 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............37 .....n ...............14.7 Japan .................................184.6
6.15 Private international bonds to GDP .......................................42 .....n.................2.8 Ireland................................215.3
6.16 Public international bonds to GDP ........................................30 .....n.................2.6 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................36 .....n.................0.1 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................38 .....n.................4.6 Switzerland ............................6.6
7.02 Venture capital availability........................................................7 .....n.................3.9 Hong Kong SAR ....................4.4
7.03 Ease of access to credit..........................................................1 .....n.................4.3 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................10 .....n.................4.6 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................10 .....n.................4.0 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................45 .....n .................1.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................32 .....n ........50,474.1 Japan............................717,241.6
7.08 Commercial bank branches ...................................................43 .....n .................7.7 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................43 .....n ...............14.4 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................30 .....n ..............117.9 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .......................................................................5 .....n ...............19.7 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Ireland
Key indicators Financial assets by major type, 2008
5.0% 11.9%
Population (millions), 2009 .........................................................4.4 US$ bn
GDP (US$ billions), 2009 .........................................................227.8 25.0% n Public debt securities .......117.8
GDP (current prices) per capita, 2009 ............................51,356.3 n Private debt securities......575.6
GDP (PPP) as share (%) of world total, 2009 ........................0.25 n Banking deposits ...............247.8
Compound annual growth rate of real GDP (%), 2005–09 ..0.12 n Equity securities ..................49.4

Total 990.5
58.1%
Total/GDP 370.2%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................18 4.2

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................15 5.5

Financial sector liberalization ......................................................1 7.0
Corporate governance.................................................................25 4.8
Legal and regulatory issues .......................................................17 4.6
Contract enforcement....................................................................6 5.8
2nd pillar: Business environment .............................................18 5.4
Human capital ...............................................................................14 5.0
146
Taxes...............................................................................................13 5.5
Infrastructure ................................................................................21 5.2
Cost of doing business ................................................................17 5.7
3rd pillar: Financial stability......................................................53 3.6
Currency stability..........................................................................40 3.3
Banking system stability..............................................................56 3.0
Risk of sovereign debt crisis ......................................................36 4.7
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services........................................6 5.1

Size index .........................................................................................2 5.9
Efficiency index.............................................................................33 4.8
Financial information disclosure..................................................3 4.0
5th pillar: Non-banking financial services .............................16 3.2
IPO activity.....................................................................................27 2.0
M&A activity..................................................................................28 2.0
Insurance .........................................................................................6 4.4
Securitization...................................................................................9 4.3
6th pillar: Financial markets......................................................23 2.8
Foreign exchange markets .........................................................24 1.2
Derivatives markets .....................................................................19 2.6
Equity market development ........................................................33 2.2
Bond market development............................................................8 4.7
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................16 3.8

Commercial access......................................................................55 2.4
Retail access...................................................................................7 5.2
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Ireland

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n ...............71.3 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................12 .....n.................4.6 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................41 .....n.................4.4 Sweden .................................5.9
1.06 Reliance on professional management..................................11 .....n.................5.8 Sweden .................................6.5
1.07 Willingness to delegate .........................................................19 .....n.................4.3 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................40 .....n.................4.7 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................20 .....n.................5.3 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................31 .....n.................4.5 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................31 .....n.................3.1 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................55 .....n .................1.8 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................46 .....n.................3.8 South Africa...........................6.0
1.14 Property rights .......................................................................11 .....n.................5.9 Switzerland ............................6.4
1.15 Intellectual property protection .............................................12 .....n.................5.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................14 .....n.................5.3 Sweden .................................6.5
1.17 Public trust of politicians .......................................................32 .....n.................3.0 Singapore ..............................6.4
1.18 Corruption perceptions index.................................................11 .....n.................8.0 Denmark................................9.3
1.19 Strength of legal rights index ................................................12 .....n.................8.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 147
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................24 .....n.................4.0 Singapore ..............................6.5
1.22 Judicial independence .............................................................8 .....n.................6.2 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................12 .....n.................6.4 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................32 .....n .............515.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................1 .....n...............20.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................4 .....n.................8.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................36 .....n...............26.9 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................20 .....n.................5.0 Switzerland ............................6.1
2.02 Quality of math and science education.................................19 .....n.................4.7 Singapore ..............................6.5
2.03 Extent of staff training ...........................................................17 .....n.................4.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................21 .....n.................5.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ............................6 .....n.................5.0 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................18 .....n ...............61.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................16 .....n.................6.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition .......16 .....n.................4.6 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................22 .....n.................0.4 China..................................–24.6
2.10 Time to pay taxes....................................................................4 .....n ...............76.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................36 .....n.................4.2 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................40 .....n.................6.1 Norway...................................7.0
2.13 Internet users .......................................................................21 .....n...............62.5 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................21 .....n...............20.1 Sweden................................41.2
2.15 Telephone lines........................................................................8 .....n...............49.7 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................18 .....n .............120.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business .....................................................2 .....n.................0.3 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Ireland
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................46 .....n.................6.7 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................20 .....n.................9.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................21 .....n ...............13.0 Australia.................................2.0
2.21 Time to register property ......................................................32 .....n...............38.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................1 .....n.................0.4 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................22 .....n .................1.9 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................46 .....n ...............–4.5 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)...........................................................16 .....n .............–64.9 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................48 .....n.................2.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles.............................1 .....n.................6.8 Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................37 .....n .................7.2 Jordan..................................16.8
148 3.12 Output loss during banking crises.........................................57 .....n.............220.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................17 .....n...............18.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................17 .....n................17.7 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................47 .....n.................3.9 Panama..................................6.0
3.16 Manageability of public debt ................................................45 .....n...............63.3 Chile ......................................6.1
3.17 Credit default swap spreads .................................................45 .....n.............254.2 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .......................................2 .....n.............208.3 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................14 .....n...............96.9 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................13 .....n .............121.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP...............................................................3 .....n.............205.8 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................15 .....n...............96.1 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ........................................1 .....n...............43.6 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................45 .....n.................3.4 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................23 .....n.................2.1 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................46 .....n...............28.2 Austria ...................................0.0
4.11 Bank operating costs to assets ...............................................1 .....n.................0.6 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................36 .....n .................7.5 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage................................................1 .....n .............100.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................29 .....n.................0.6 China ...................................22.0
5.02 IPO proceeds amount ...........................................................17 .....n.................0.4 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................38 .....n.................0.3 China....................................12.6
 Ireland

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................28 .....n.................0.4 United States ......................36.0
5.05 M&A transaction value to GDP .............................................21 .....n.................5.1 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................32 .....n.................0.4 United States ......................23.0
Insurance
5.07 Life insurance density .............................................................1 .....n ...............15.6 Ireland..................................15.6
5.08 Non–life insurance density .....................................................7 .....n.................4.0 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ..........................n/a .........................n/a China .....................................0.3
5.10 Life insurance coverage ........................................................23 .....n.................0.7 India.....................................55.4
5.11 Non–life insurance coverage .................................................45 .....n.................0.2 China....................................14.6
5.12 Relative value-added of insurance to GDP ..............................6 .....n.................2.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ..............................................................4 .....n.................4.5 United States.......................10.8
5.14 Share of total number of securitization deals .......................22 .....n.................0.4 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................23 .....n.................0.3 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................25 .....n.................0.2 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................26 .....n.................0.3 United Kingdom ..................40.8

Derivatives markets
149
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................26 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................15 .....n.................0.4 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................23 .....n.................0.1 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......14 .....n .................1.0 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................20 .....n.................0.2 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ..................................................n/a .........................n/a Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................35 .....n...............58.2 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................21 .....n...............82.9 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ..................n/a .........................n/a Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............19 .....n...............22.4 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............16 .....n...............39.5 Japan .................................184.6
6.15 Private international bonds to GDP .........................................1 .....n .............215.3 Ireland................................215.3
6.16 Public international bonds to GDP ..........................................4 .....n...............25.6 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................22 .....n.................0.9 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................30 .....n.................5.0 Switzerland ............................6.6
7.02 Venture capital availability......................................................46 .....n.................2.3 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................56 .....n .................1.5 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................50 .....n.................2.8 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................52 .....n.................2.1 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................57 .....n ...............–8.8 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts .....................................7 .....n ......218,184.5 Japan............................717,241.6
7.08 Commercial bank branches .....................................................1 .....n ...............57.3 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................14 .....n...............95.7 Canada...............................218.5
7.10 Total number of point of sale (POS) devices .........................10 .....n..........2,258.0 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Israel
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .........................................................7.3 US$ bn
GDP (US$ billions), 2009 .........................................................194.8 28.5%
32.3% n Public debt securities .......152.3
GDP (current prices) per capita, 2009 ............................26,796.7 n Private debt securities........10.7
GDP (PPP) as share (%) of world total, 2009 ........................0.30 n Banking deposits ...............174.5
Compound annual growth rate of real GDP (%), 2005–09 ..3.02 n Equity securities ................134.5
2.3%
Total 472.0
37.0%
Total/GDP 233.5%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................27 3.9

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................19 5.1

Financial sector liberalization ....................................................25 5.9
Corporate governance.................................................................22 4.9
Legal and regulatory issues .......................................................19 4.5
Contract enforcement..................................................................18 5.2
2nd pillar: Business environment .............................................33 4.4
Human capital ...............................................................................25 4.5
150
Taxes...............................................................................................39 4.4
Infrastructure ................................................................................16 5.4
Cost of doing business ................................................................51 3.5
3rd pillar: Financial stability......................................................32 4.5
Currency stability..........................................................................25 4.2
Banking system stability..............................................................33 4.3
Risk of sovereign debt crisis ......................................................30 5.0
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................21 4.1

Size index .......................................................................................27 2.9
Efficiency index.............................................................................19 5.6
Financial information disclosure................................................16 3.7
5th pillar: Non-banking financial services .............................31 2.2
IPO activity.....................................................................................14 3.2
M&A activity..................................................................................37 1.6
Insurance .......................................................................................20 3.1
Securitization.................................................................................55 1.0
6th pillar: Financial markets......................................................22 2.8
Foreign exchange markets .........................................................25 1.2
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................13 3.9
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................17 3.7

Commercial access......................................................................16 3.8
Retail access.................................................................................14 3.6
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Israel

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......34 .....n...............28.6 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................25 .....n.................4.4 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................30 .....n.................4.6 Sweden .................................5.9
1.06 Reliance on professional management .................................18 .....n.................5.3 Sweden .................................6.5
1.07 Willingness to delegate.........................................................22 .....n.................4.2 Sweden .................................6.5
1.08 Strength of auditing and reporting standards........................19 .....n.................5.5 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................19 .....n.................5.3 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................15 .....n.................5.0 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................29 .....n.................3.1 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................19 .....n.................3.7 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................21 .....n.................5.0 South Africa...........................6.0
1.14 Property rights.......................................................................29 .....n.................4.7 Switzerland ............................6.4
1.15 Intellectual property protection .............................................26 .....n.................4.2 Sweden .................................6.2
1.16 Diversion of public funds.......................................................16 .....n.................5.3 Sweden .................................6.5
1.17 Public trust of politicians .......................................................21 .....n.................3.7 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................21 .....n.................6.1 Denmark................................9.3
1.19 Strength of legal rights index ..................................................4 .....n.................9.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................18 .....n.................9.5 Sweden ...............................15.0 151
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................20 .....n.................4.3 Singapore ..............................6.5
1.22 Judicial independence ...........................................................12 .....n.................6.2 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................10 .....n.................6.4 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................51 .....n.............890.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................30 .....n...............35.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................4 .....n.................8.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................31 .....n...............25.3 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................28 .....n.................4.6 Switzerland ............................6.1
2.02 Quality of math and science education.................................43 .....n.................3.5 Singapore ..............................6.5
2.03 Extent of staff training...........................................................18 .....n.................4.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................24 .....n.................4.9 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................40 .....n.................3.8 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................19 .....n...............60.4 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................21 .....n.................6.0 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......22 .....n.................4.4 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................41 .....n...............20.7 China..................................–24.6
2.10 Time to pay taxes..................................................................29 .....n.............230.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................30 .....n.................4.9 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .........................................3 .....n.................6.9 Norway...................................7.0
2.13 Internet users .......................................................................27 .....n...............49.6 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................15 .....n...............23.9 Sweden................................41.2
2.15 Telephone lines......................................................................10 .....n...............45.7 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................12 .....n..............127.4 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business....................................................19 .....n.................4.2 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Israel
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................38 .....n.................5.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................52 .....n...............23.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................47 .....n...............34.0 Australia.................................2.0
2.21 Time to register property ......................................................54 .....n .............144.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................43 .....n.................4.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................14 .....n.................2.8 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................21 .....n...............68.6 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................23 .....n.................2.4 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................26 .....n...............46.6 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises ..................................................11 .....n.................0.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................22 .....n.................5.2 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................27 .....n.................6.1 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................43 .....n.................6.4 Jordan..................................16.8
152 3.12 Output loss during banking crises.........................................32 .....n...............38.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................21 .....n................17.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................26 .....n ...............15.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................24 .....n.................5.3 Panama..................................6.0
3.16 Manageability of public debt ................................................51 .....n...............78.4 Chile ......................................6.1
3.17 Credit default swap spreads .................................................23 .....n .............119.7 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................22 .....n...............95.5 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................16 .....n...............86.9 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................41 .....n...............53.7 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................25 .....n...............86.6 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................17 .....n...............86.9 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................29 .....n.................4.4 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................26 .....n.................2.2 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................47 .....n.................3.3 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ...............................5 .....n .................1.5 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................11 .....n...............89.8 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................26 .....n.................0.8 China ...................................22.0
5.02 IPO proceeds amount .............................................................8 .....n.................0.7 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................14 .....n.................2.0 China....................................12.6
 Israel

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................36 .....n.................0.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................32 .....n.................3.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................36 .....n.................0.3 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................26 .....n.................2.5 Ireland..................................15.6
5.08 Non–life insurance density ...................................................20 .....n.................2.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................21 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................39 .....n.................0.2 India.....................................55.4
5.11 Non–life insurance coverage .................................................43 .....n.................0.2 China....................................14.6
5.12 Relative value-added of insurance to GDP ..............................7 .....n.................2.8 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................54 .....n.................0.1 United States.......................10.8
5.14 Share of total number of securitization deals .......................52 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................24 .....n.................0.3 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................27 .....n.................0.2 United Kingdom ..................40.8

Derivatives markets
153
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................21 .....n.................0.2 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................37 .....n...............44.5 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................10 .....n..............157.8 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................22 .....n...............79.5 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people.....................5 .....n .................1.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................32 .....n.................5.6 Ireland................................215.3
6.16 Public international bonds to GDP ........................................24 .....n.................4.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................19 .....n.................5.8 Switzerland ............................6.6
7.02 Venture capital availability........................................................8 .....n.................3.9 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................29 .....n.................3.1 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................26 .....n.................4.0 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................35 .....n.................2.9 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................20 .....n.................4.9 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................22 .....n ......105,570.8 Japan............................717,241.6
7.08 Commercial bank branches ...................................................21 .....n ...............19.8 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................11 .....n .............104.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Italy
Key indicators Financial assets by major type, 2008
7.0%
Population (millions), 2009 .......................................................59.8 US$ bn
GDP (US$ billions), 2009 ......................................................2,118.3 21.0% 33.1% n Public debt securities ....2,448.5
GDP (current prices) per capita, 2009 ............................35,435.1 n Private debt securities...2,872.7
GDP (PPP) as share (%) of world total, 2009 ........................2.51 n Banking deposits ............1,550.9
Compound annual growth rate of real GDP (%), 2005–09–0.60 n Equity securities ................520.9

Total 7,392.9
38.9%
Total/GDP 320.4%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................25 4.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................30 4.3

Financial sector liberalization ......................................................1 7.0
Corporate governance.................................................................53 3.6
Legal and regulatory issues .......................................................37 3.4
Contract enforcement..................................................................53 3.2
2nd pillar: Business environment .............................................24 4.8
Human capital ...............................................................................30 4.3
154
Taxes...............................................................................................23 4.9
Infrastructure ................................................................................26 4.8
Cost of doing business ................................................................32 5.0
3rd pillar: Financial stability......................................................38 4.3
Currency stability..........................................................................36 3.5
Banking system stability..............................................................17 5.1
Risk of sovereign debt crisis ......................................................45 3.9
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................22 4.1

Size index .......................................................................................21 3.2
Efficiency index.............................................................................29 5.2
Financial information disclosure................................................13 3.9
5th pillar: Non-banking financial services .............................21 2.7
IPO activity.....................................................................................30 1.9
M&A activity..................................................................................15 3.6
Insurance .......................................................................................25 2.8
Securitization.................................................................................26 2.5
6th pillar: Financial markets......................................................15 3.9
Foreign exchange markets .........................................................17 1.7
Derivatives markets .....................................................................10 5.4
Equity market development ........................................................19 3.5
Bond market development............................................................7 4.8
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................22 3.6

Commercial access......................................................................54 2.7
Retail access.................................................................................11 4.4
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Italy

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n...............72.8 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................49 .....n.................3.8 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................56 .....n.................3.9 Sweden .................................5.9
1.06 Reliance on professional management .................................56 .....n.................3.5 Sweden .................................6.5
1.07 Willingness to delegate.........................................................51 .....n.................3.2 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................51 .....n.................4.0 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................40 .....n.................3.7 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................54 .....n.................3.4 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................54 .....n.................2.2 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................23 .....n.................3.5 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................37 .....n.................4.1 South Africa...........................6.0
1.14 Property rights.......................................................................38 .....n.................4.3 Switzerland ............................6.4
1.15 Intellectual property protection .............................................37 .....n.................3.7 Sweden .................................6.2
1.16 Diversion of public funds.......................................................38 .....n.................3.1 Sweden .................................6.5
1.17 Public trust of politicians .......................................................45 .....n.................2.0 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................33 .....n.................4.3 Denmark................................9.3
1.19 Strength of legal rights index ................................................50 .....n.................3.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 155
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................43 .....n.................3.0 Singapore ..............................6.5
1.22 Judicial independence ...........................................................44 .....n.................3.5 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................35 .....n.................4.0 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................54 .....n ...........1210.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................46 .....n...............40.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................27 .....n.................5.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................42 .....n...............29.9 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................25 .....n.................4.7 Switzerland ............................6.1
2.02 Quality of math and science education.................................39 .....n.................3.6 Singapore ..............................6.5
2.03 Extent of staff training...........................................................56 .....n.................3.2 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................28 .....n.................4.7 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................44 .....n.................3.6 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................13 .....n...............68.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................42 .....n.................4.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......44 .....n.................3.8 Singapore ..............................5.8
2.09 Marginal tax variation ..............................................................7 .....n .............–15.9 China..................................–24.6
2.10 Time to pay taxes..................................................................41 .....n.............334.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................40 .....n.................4.0 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................50 .....n.................5.5 Norway...................................7.0
2.13 Internet users .......................................................................29 .....n ...............41.9 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................22 .....n...............18.9 Sweden................................41.2
2.15 Telephone lines......................................................................21 .....n...............35.7 Switzerland ..........................64.1
2.16 Mobile telephone subscribers.................................................4 .....n .............151.6 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................48 .....n................17.9 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Italy
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................35 .....n.................4.6 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................47 .....n...............22.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................15 .....n ...............10.0 Australia.................................2.0
2.21 Time to register property ......................................................25 .....n ...............27.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................21 .....n .................1.8 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................31 .....n.................0.6 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................41 .....n ...............–3.1 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies) ...........................................................11 .....n .............–19.2 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................21 .....n.................5.2 Ireland....................................6.8
3.10 Financial Stress Index............................................................19 .....n.................4.6 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................34 .....n .................7.9 Jordan..................................16.8
156 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................24 .....n ...............16.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................22 .....n ...............16.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................49 .....n.................3.7 Panama..................................6.0
3.16 Manageability of public debt ................................................56 .....n .............115.8 Chile ......................................6.1
3.17 Credit default swap spreads .................................................36 .....n .............173.2 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................11 .....n..............127.1 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................12 .....n.................4.5 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................24 .....n...............68.1 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................23 .....n ...............87.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................15 .....n .............103.3 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................27 .....n ...............67.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................25 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................44 .....n.................3.4 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................19 .....n.................2.0 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................32 .....n.................8.1 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................22 .....n .................1.6 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................32 .....n.................6.2 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................14 .....n ...............77.5 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................13 .....n ...............12.2 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................12 .....n .................1.4 China ...................................22.0
5.02 IPO proceeds amount ...........................................................42 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................18 .....n .................1.5 China....................................12.6
 Italy

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................12 .....n.................3.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................24 .....n.................4.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................15 .....n .................1.9 United States ......................23.0
Insurance
5.07 Life insurance density............................................................11 .....n.................5.4 Ireland..................................15.6
5.08 Non–life insurance density ...................................................19 .....n.................2.6 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................47 .....n ...............–0.1 China .....................................0.3
5.10 Life insurance coverage ..........................................................9 .....n.................3.3 India.....................................55.4
5.11 Non–life insurance coverage .................................................12 .....n .................1.5 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................42 .....n.................0.6 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................34 .....n .................1.1 United States.......................10.8
5.14 Share of total number of securitization deals........................16 .....n.................0.9 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover.............................................16 .....n.................0.9 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................16 .....n.................0.6 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover...........................................15 .....n .................1.0 United Kingdom ..................40.8

Derivatives markets
157
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................12 .....n.................0.7 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps................................9 .....n .................1.6 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options..............................7 .....n .................1.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......21 .....n.................0.3 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................12 .....n.................0.7 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio .....................................................1 .....n.............348.2 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................41 .....n...............50.6 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................12 .....n..............167.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................31 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ..............4 .....n...............75.7 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP ...............2 .....n...............89.3 Japan .................................184.6
6.15 Private international bonds to GDP........................................11 .....n ...............51.6 Ireland................................215.3
6.16 Public international bonds to GDP.........................................10 .....n................11.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................18 .....n .................1.5 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................44 .....n.................4.4 Switzerland ............................6.6
7.02 Venture capital availability......................................................52 .....n.................2.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................33 .....n.................2.8 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................46 .....n.................3.5 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................50 .....n.................2.2 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................49 .....n.................0.8 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................28 .....n ........77,499.2 Japan............................717,241.6
7.08 Commercial bank branches .....................................................2 .....n...............52.0 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................13 .....n ...............97.8 Canada...............................218.5
7.10 Total number of point of sale (POS) devices .........................13 .....n ..........2,091.0 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Japan
Key indicators Financial assets by major type, 2008
13.1%
Population (millions), 2009 .....................................................127.6 US$ bn
GDP (US$ billions), 2009 ......................................................5,068.1
34.2% n Public debt securities ....8,411.6
GDP (current prices) per capita, 2009 ............................39,731.0 n Private debt securities...2,262.6
GDP (PPP) as share (%) of world total, 2009 ........................6.00 n Banking deposits ..........10,719.9
Compound annual growth rate of real GDP (%), 2005–09–0.44 n Equity securities .............3,220.5
43.6%
Total 24,614.5
9.2%

Total/GDP 503.7%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index........................................................9 4.7

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................16 5.5

Financial sector liberalization ....................................................14 6.9
Corporate governance.................................................................14 5.1
Legal and regulatory issues .......................................................18 4.6
Contract enforcement..................................................................10 5.6
2nd pillar: Business environment .............................................20 5.1
Human capital ...............................................................................16 4.9
158
Taxes...............................................................................................37 4.4
Infrastructure ................................................................................17 5.4
Cost of doing business ................................................................15 5.8
3rd pillar: Financial stability......................................................33 4.5
Currency stability..........................................................................19 4.4
Banking system stability..............................................................39 4.0
Risk of sovereign debt crisis ......................................................28 5.1
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services........................................5 5.2

Size index .........................................................................................4 5.4
Efficiency index.............................................................................12 5.9
Financial information disclosure................................................22 3.3
5th pillar: Non-banking financial services ...............................7 4.1
IPO activity.....................................................................................16 3.1
M&A activity....................................................................................4 5.3
Insurance .........................................................................................2 4.8
Securitization.................................................................................16 3.3
6th pillar: Financial markets........................................................5 4.8
Foreign exchange markets ...........................................................3 6.7
Derivatives markets .......................................................................4 6.9
Equity market development ........................................................16 3.7
Bond market development..........................................................18 3.3
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................28 3.4

Commercial access......................................................................36 3.4
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Japan

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services .......16 .....n...............62.5 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................28 .....n.................4.3 Canada...................................5.2
1.05 Efficacy of corporate boards..................................................15 .....n.................5.1 Sweden .................................5.9
1.06 Reliance on professional management .................................14 .....n.................5.6 Sweden .................................6.5
1.07 Willingness to delegate .........................................................11 .....n.................4.8 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................22 .....n.................5.4 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................15 .....n.................5.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................17 .....n.................5.0 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................23 .....n.................3.3 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................48 .....n.................2.4 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................24 .....n.................4.8 South Africa...........................6.0
1.14 Property rights .......................................................................17 .....n.................5.6 Switzerland ............................6.4
1.15 Intellectual property protection .............................................17 .....n.................5.2 Sweden .................................6.2
1.16 Diversion of public funds.......................................................19 .....n.................5.2 Sweden .................................6.5
1.17 Public trust of politicians .......................................................30 .....n.................3.1 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................14 .....n .................7.7 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................15 .....n ...............10.0 Sweden ...............................15.0 159
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................19 .....n.................4.4 Singapore ..............................6.5
1.22 Judicial independence ...........................................................15 .....n.................5.7 Sweden .................................6.6
1.23 Irregular payments in judicial decisions .................................11 .....n.................6.4 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................10 .....n.............360.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract ........................11 .....n...............30.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................12 .....n .................7.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................24 .....n...............22.7 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................41 .....n.................4.2 Switzerland ............................6.1
2.02 Quality of math and science education.................................15 .....n.................4.9 Singapore ..............................6.5
2.03 Extent of staff training.............................................................5 .....n.................5.4 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................13 .....n.................5.6 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................25 .....n.................4.1 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................24 .....n...............58.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection.......................................11 .....n.................6.3 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......30 .....n.................4.1 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................35 .....n ...............13.5 China..................................–24.6
2.10 Time to pay taxes..................................................................42 .....n.............355.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................13 .....n.................6.0 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .........................................6 .....n.................6.8 Norway...................................7.0
2.13 Internet users .......................................................................10 .....n...............75.4 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................16 .....n...............23.7 Sweden................................41.2
2.15 Telephone lines......................................................................20 .....n...............38.0 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................42 .....n...............86.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................33 .....n .................7.5 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Japan
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................38 .....n.................5.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................5 .....n.................4.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................37 .....n...............23.0 Australia.................................2.0
2.21 Time to register property ......................................................12 .....n ...............14.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................2 .....n.................0.6 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................35 .....n.................0.5 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................19 .....n.................3.6 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies).............................................................3 .....n...............55.3 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................27 .....n .................1.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................23 .....n.................5.1 Ireland....................................6.8
3.10 Financial Stress Index............................................................17 .....n.................4.0 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................38 .....n .................7.1 Jordan..................................16.8
160 3.12 Output loss during banking crises.........................................41 .....n ...............67.5 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................17 .....n...............18.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................17 .....n................17.7 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................16 .....n.................5.5 Panama..................................6.0
3.16 Manageability of public debt ................................................57 .....n.............189.2 Chile ......................................6.1
3.17 Credit default swap spreads..................................................19 .....n...............96.0 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .......................................7 .....n .............150.9 Denmark ............................219.5
4.02 Central bank assets to GDP ....................................................3 .....n ...............12.3 Egypt ...................................23.8
4.03 Financial system deposits to GDP ..........................................2 .....n.............182.7 Hong Kong SAR ................285.2
4.04 M2 to GDP ..............................................................................4 .....n .............159.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................19 .....n...............94.9 United States.....................210.7
4.06 Bank deposits to GDP .............................................................2 .....n.............183.1 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................21 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................48 .....n.................3.1 Netherlands ...........................6.5
4.09 Bank overhead costs ...............................................................9 .....n .................1.3 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets ...............................................6 .....n.................0.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ...............................8 .....n .................1.8 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................16 .....n ...............76.2 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share...................................................................10 .....n .................1.6 China ...................................22.0
5.02 IPO proceeds amount ...........................................................49 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ................................................................4 .....n.................6.4 China....................................12.6
 Japan

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ..................................................................4 .....n.................4.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................37 .....n.................3.0 Netherlands .........................14.2
5.06 Share of total number of M&A deals ......................................2 .....n.................8.8 United States ......................23.0
Insurance
5.07 Life insurance density .............................................................5 .....n .................7.9 Ireland..................................15.6
5.08 Non–life insurance density ...................................................25 .....n.................2.1 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................16 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ..........................................................4 .....n ...............10.0 India.....................................55.4
5.11 Non–life insurance coverage ...................................................7 .....n.................2.7 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................15 .....n .................1.8 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................39 .....n.................0.8 United States.......................10.8
5.14 Share of total number of securitization deals .........................7 .....n.................2.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ..............................................4 .....n .................7.9 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ...........................3 .....n.................6.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ............................................6 .....n.................5.1 United Kingdom ..................40.8

Derivatives markets
161
6.04 Interest rate derivatives turnover: Forward rate
agreements............................................................................11 .....n .................1.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps................................7 .....n.................3.2 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options..............................3 .....n.................8.8 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ........8 .....n.................2.7 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options .....................4 .....n.................4.3 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................11 .....n .............159.7 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................24 .....n .............102.3 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................14 .....n .............153.7 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ...................14 .....n.................0.3 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............12 .....n ...............37.4 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP ...............1 .....n.............184.6 Japan .................................184.6
6.15 Private international bonds to GDP .......................................28 .....n .................7.8 Ireland................................215.3
6.16 Public international bonds to GDP ........................................49 .....n.................0.1 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................16 .....n .................1.5 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................28 .....n.................5.1 Switzerland ............................6.6
7.02 Venture capital availability......................................................32 .....n.................2.8 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................15 .....n.................3.6 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................16 .....n.................4.4 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................30 .....n.................3.1 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................52 .....n.................0.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts .....................................1 .....n .......717,241.6 Japan............................717,241.6
7.08 Commercial bank branches ...................................................33 .....n ...............12.5 Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Jordan
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .........................................................6.0 17.8% US$ bn
GDP (US$ billions), 2009 ...........................................................22.9
n Public debt securities .........12.4
GDP (current prices) per capita, 2009 ..............................3,828.6 n Private debt securities.........n/a
GDP (PPP) as share (%) of world total, 2009 ........................0.05 51.6% n Banking deposits .................21.3
Compound annual growth rate of real GDP (%), 2005–09 ..5.42 n Equity securities ..................35.8
30.6%
Total 69.5

Total/GDP 327.6%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................29 3.6

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................25 4.5

Financial sector liberalization ....................................................22 6.0
Corporate governance.................................................................36 4.3
Legal and regulatory issues .......................................................30 3.7
Contract enforcement..................................................................40 3.9
2nd pillar: Business environment .............................................43 4.0
Human capital ...............................................................................40 3.9
162
Taxes...............................................................................................33 4.5
Infrastructure ................................................................................43 3.4
Cost of doing business ................................................................48 4.0
3rd pillar: Financial stability......................................................41 4.2
Currency stability..........................................................................39 3.4
Banking system stability..............................................................19 5.0
Risk of sovereign debt crisis ......................................................46 3.9
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................26 4.0

Size index .......................................................................................10 4.0
Efficiency index.............................................................................21 5.6
Financial information disclosure................................................54 1.0
5th pillar: Non-banking financial services .............................29 2.3
IPO activity.....................................................................................25 2.1
M&A activity..................................................................................35 1.7
Insurance .......................................................................................47 2.1
Securitization.................................................................................14 3.4
6th pillar: Financial markets......................................................19 3.3
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................21 3.3
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................34 3.2

Commercial access......................................................................20 3.7
Retail access.................................................................................31 2.7
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Jordan

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......21 .....n...............49.4 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ................................n/a .........................n/a Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................54 .....n.................3.4 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................39 .....n.................4.4 Sweden .................................5.9
1.06 Reliance on professional management .................................50 .....n.................3.9 Sweden .................................6.5
1.07 Willingness to delegate.........................................................43 .....n.................3.6 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................25 .....n.................5.3 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................26 .....n.................4.5 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................19 .....n.................4.9 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................19 .....n.................3.5 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................45 .....n.................2.6 Switzerland ............................5.6
1.13 Regulation of securities exchanges .......................................19 .....n.................5.0 South Africa...........................6.0
1.14 Property rights.......................................................................21 .....n.................5.4 Switzerland ............................6.4
1.15 Intellectual property protection .............................................24 .....n.................4.4 Sweden .................................6.2
1.16 Diversion of public funds.......................................................24 .....n.................4.3 Sweden .................................6.5
1.17 Public trust of politicians .......................................................23 .....n.................3.5 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................26 .....n.................5.0 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................46 .....n.................2.0 Sweden ...............................15.0 163
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................44 .....n.................2.9 Singapore ..............................6.5
1.22 Judicial independence ...........................................................27 .....n.................4.6 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................26 .....n.................5.1 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................48 .....n.............689.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................39 .....n...............38.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................49 .....n.................4.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................44 .....n ...............31.2 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................45 .....n.................3.9 Switzerland ............................6.1
2.02 Quality of math and science education.................................31 .....n.................4.4 Singapore ..............................6.5
2.03 Extent of staff training...........................................................52 .....n.................3.6 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................33 .....n.................4.4 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................48 .....n.................3.4 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................35 .....n...............39.9 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................36 .....n.................4.7 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......28 .....n.................4.2 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................33 .....n ...............12.6 China..................................–24.6
2.10 Time to pay taxes....................................................................9 .....n..............101.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................24 .....n.................5.2 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................19 .....n.................6.6 Norway...................................7.0
2.13 Internet users .......................................................................41 .....n...............26.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................46 .....n.................2.2 Sweden................................41.2
2.15 Telephone lines......................................................................52 .....n.................8.5 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................43 .....n...............86.6 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................55 .....n...............49.5 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Jordan
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................51 .....n .................7.5 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................20 .....n.................9.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................21 .....n ...............13.0 Australia.................................2.0
2.21 Time to register property ......................................................22 .....n ...............21.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................50 .....n.................4.3 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) ....................n/a .........................n/a Venezuela ............................14.5
3.02 External vulnerability indicator...............................................24 .....n ...............81.2 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................57 .....n..............–11.1 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................33 .....n...............34.3 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................30 .....n...............63.1 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................16 .....n .................1.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ...........................11 .....n.................6.1 Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio....................................................................1 .....n ...............16.8 Jordan..................................16.8
164 3.12 Output loss during banking crises.........................................52 .....n .............106.4 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................41 .....n................11.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................48 .....n.................9.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ......................................9 .....n.................5.8 Panama..................................6.0
3.16 Manageability of public debt ................................................41 .....n...............59.4 Chile ......................................6.1
3.17 Credit default swap spreads.................................................n/a .........................n/a Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................16 .....n .............119.8 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................13 .....n.................4.0 Egypt ...................................23.8
4.03 Financial system deposits to GDP.........................................10 .....n .............108.2 Hong Kong SAR ................285.2
4.04 M2 to GDP ..............................................................................8 .....n .............145.5 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................20 .....n...............94.2 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................11 .....n .............108.1 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................31 .....n.................4.3 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................22 .....n.................2.1 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................25 .....n .................1.7 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................33 .....n.................6.4 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................49 .....n.................0.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................21 .....n .................1.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................49 .....n.................0.1 China ...................................22.0
5.02 IPO proceeds amount............................................................11 .....n.................0.5 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................46 .....n.................0.2 China....................................12.6
 Jordan

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................54 .....n.................0.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................25 .....n.................4.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................53 .....n.................0.0 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................49 .....n.................0.2 Ireland..................................15.6
5.08 Non–life insurance density ...................................................27 .....n.................2.0 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................42 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................54 .....n.................0.0 India.....................................55.4
5.11 Non–life insurance coverage .................................................48 .....n.................0.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................17 .....n .................1.7 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ..............................................................5 .....n.................3.7 United States.......................10.8
5.14 Share of total number of securitization deals .......................52 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
165
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................43 .....n...............24.0 Italy....................................348.2
6.10 Stock market capitalization to GDP .........................................4 .....n.............208.8 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................20 .....n...............83.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ...................10 .....n.................0.4 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................54 .....n.................0.0 Ireland................................215.3
6.16 Public international bonds to GDP ........................................44 .....n.................0.6 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................35 .....n.................4.7 Switzerland ............................6.6
7.02 Venture capital availability......................................................35 .....n.................2.7 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................30 .....n.................3.0 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................23 .....n.................4.1 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................34 .....n.................3.0 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP .........................................13 .....n.................8.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................24 .....n........89,880.9 Japan............................717,241.6
7.08 Commercial bank branches ...................................................24 .....n................17.8 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................40 .....n...............26.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .......................................................................8 .....n ...............12.4 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Kazakhstan
Key indicators Financial assets by major type, 2008
10.1%
Population (millions), 2009 .......................................................15.6 US$ bn
26.9%
GDP (US$ billions), 2009 .........................................................109.3
n Public debt securities .........11.7
GDP (current prices) per capita, 2009 ..............................7,019.0 n Private debt securities........34.7
30.0%
GDP (PPP) as share (%) of world total, 2009 ........................0.25 n Banking deposits .................38.0
Compound annual growth rate of real GDP (%), 2005–09 ..4.71 n Equity securities ..................31.1

Total 115.4
32.9%
Total/GDP 85.1%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................49 3.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................50 3.2

Financial sector liberalization ....................................................52 2.0
Corporate governance.................................................................49 3.8
Legal and regulatory issues .......................................................47 3.1
Contract enforcement..................................................................37 4.1
2nd pillar: Business environment .............................................39 4.2
Human capital ...............................................................................46 3.7
166
Taxes...............................................................................................45 4.0
Infrastructure ................................................................................46 3.2
Cost of doing business ................................................................16 5.8
3rd pillar: Financial stability......................................................49 3.8
Currency stability..........................................................................47 2.7
Banking system stability..............................................................42 3.9
Risk of sovereign debt crisis ......................................................34 4.8
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................44 2.9

Size index .......................................................................................44 1.6
Efficiency index.............................................................................40 4.6
Financial information disclosure................................................40 1.9
5th pillar: Non-banking financial services .............................22 2.5
IPO activity.....................................................................................12 3.3
M&A activity..................................................................................24 2.4
Insurance .......................................................................................57 1.1
Securitization.................................................................................13 3.5
6th pillar: Financial markets......................................................43 1.7
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................49 1.5
Bond market development..........................................................34 2.0
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................53 2.5

Commercial access......................................................................37 3.4
Retail access.................................................................................42 1.7
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Kazakhstan

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................49 .....n ...............–1.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services ......n/a .........................n/a Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................49 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................42 .....n.................4.0 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................43 .....n.................4.4 Sweden .................................5.9
1.06 Reliance on professional management .................................55 .....n.................3.5 Sweden .................................6.5
1.07 Willingness to delegate.........................................................49 .....n.................3.2 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................48 .....n.................4.2 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................42 .....n.................3.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................50 .....n.................3.6 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................25 .....n.................3.2 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................25 .....n.................3.3 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................56 .....n.................3.3 South Africa...........................6.0
1.14 Property rights.......................................................................51 .....n.................3.5 Switzerland ............................6.4
1.15 Intellectual property protection .............................................48 .....n.................2.8 Sweden .................................6.2
1.16 Diversion of public funds.......................................................44 .....n.................2.8 Sweden .................................6.5
1.17 Public trust of politicians .......................................................25 .....n.................3.4 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................49 .....n.................2.7 Denmark................................9.3
1.19 Strength of legal rights index ................................................37 .....n.................5.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................38 .....n.................5.5 Sweden ...............................15.0 167
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................29 .....n.................3.7 Singapore ..............................6.5
1.22 Judicial independence ...........................................................50 .....n.................2.9 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................52 .....n.................2.9 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................13 .....n.............390.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................39 .....n...............38.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................27 .....n.................5.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................22 .....n...............22.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................51 .....n.................3.6 Switzerland ............................6.1
2.02 Quality of math and science education.................................38 .....n.................3.8 Singapore ..............................6.5
2.03 Extent of staff training...........................................................50 .....n.................3.6 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................48 .....n.................4.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................49 .....n.................3.4 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................34 .....n ...............41.0 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................46 .....n.................3.9 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......45 .....n.................3.8 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................31 .....n ...............10.4 China..................................–24.6
2.10 Time to pay taxes..................................................................35 .....n .............271.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................41 .....n.................4.0 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................52 .....n.................5.3 Norway...................................7.0
2.13 Internet users .......................................................................50 .....n................11.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................40 .....n.................4.3 Sweden................................41.2
2.15 Telephone lines......................................................................35 .....n...............22.3 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................33 .....n...............96.1 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................21 .....n.................4.8 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Kazakhstan
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ....................................................2 .....n.................0.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................31 .....n ...............15.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................32 .....n...............20.0 Australia.................................2.0
2.21 Time to register property ......................................................33 .....n...............40.0 Multiple (3) ............................2.0
2.22 Time to close a business.......................................................16 .....n .................1.5 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) ....................n/a .........................n/a Venezuela ............................14.5
3.02 External vulnerability indicator...............................................29 .....n .............126.8 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................38 .....n ...............–2.1 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................36 .....n...............43.2 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................33 .....n...............94.7 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................53 .....n .................1.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................27 .....n.................9.7 Jordan..................................16.8
168 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................40 .....n ...............12.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................36 .....n................11.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................27 .....n.................5.2 Panama..................................6.0
3.16 Manageability of public debt ..................................................5 .....n ...............13.7 Chile ......................................6.1
3.17 Credit default swap spreads .................................................42 .....n .............227.3 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................34 .....n...............66.2 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................39 .....n.................0.1 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................45 .....n ...............31.9 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................45 .....n ...............47.5 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................33 .....n...............64.2 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................47 .....n...............32.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................38 .....n.................3.9 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................35 .....n.................3.0 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................21 .....n .................1.5 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................40 .....n ...............21.2 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................34 .....n...............29.5 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................25 .....n.................0.8 China ...................................22.0
5.02 IPO proceeds amount .............................................................1 .....n .................1.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................40 .....n.................0.2 China....................................12.6
 Kazakhstan

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................34 .....n.................0.3 United States ......................36.0
5.05 M&A transaction value to GDP .............................................15 .....n .................7.8 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................46 .....n.................0.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................56 .....n.................0.1 Ireland..................................15.6
5.08 Non–life insurance density ...................................................49 .....n.................0.6 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................49 .....n ...............–0.2 China .....................................0.3
5.10 Life insurance coverage ........................................................55 .....n.................0.0 India.....................................55.4
5.11 Non–life insurance coverage .................................................51 .....n.................0.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ...........................n/a .........................n/a Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ..............................................................8 .....n.................3.2 United States.......................10.8
5.14 Share of total number of securitization deals .......................21 .....n.................0.4 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
169
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ..................................................n/a .........................n/a Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................38 .....n...............52.2 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................37 .....n ...............14.7 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................25 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................17 .....n...............32.5 Ireland................................215.3
6.16 Public international bonds to GDP ........................................51 .....n.................0.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................23 .....n.................0.7 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................53 .....n.................3.6 Switzerland ............................6.6
7.02 Venture capital availability......................................................45 .....n.................2.4 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................47 .....n.................2.4 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................51 .....n.................2.8 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................54 .....n.................2.1 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP...........................................2 .....n ...............13.3 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................48 .....n.................2.8 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................27 .....n...............52.1 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................29 .....n .............170.9 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................15 .....n.................3.4 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Korea, Rep.
Key indicators Financial assets by major type, 2008
16.6%
Population (millions), 2009 .......................................................48.8 US$ bn
GDP (US$ billions), 2009 .........................................................832.5
36.1% n Public debt securities .......227.1
GDP (current prices) per capita, 2009 ............................17,074.3 9.0%
n Private debt securities......122.6
GDP (PPP) as share (%) of world total, 2009 ........................1.94 n Banking deposits ...............525.2
Compound annual growth rate of real GDP (%), 2005–09 ..2.53 n Equity securities ................494.6

Total 1,369.5
38.3%
Total/GDP 147.0%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................24 4.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................34 4.1

Financial sector liberalization ....................................................35 3.9
Corporate governance.................................................................42 4.1
Legal and regulatory issues .......................................................29 3.8
Contract enforcement..................................................................26 4.6
2nd pillar: Business environment .............................................19 5.3
Human capital ...............................................................................15 5.0
170
Taxes...............................................................................................25 4.8
Infrastructure ..................................................................................8 5.8
Cost of doing business ................................................................18 5.7
3rd pillar: Financial stability......................................................43 4.1
Currency stability..........................................................................43 3.3
Banking system stability..............................................................47 3.6
Risk of sovereign debt crisis ......................................................14 5.8
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................28 4.0

Size index .......................................................................................31 2.7
Efficiency index.............................................................................28 5.3
Financial information disclosure................................................14 3.8
5th pillar: Non-banking financial services ...............................6 4.2
IPO activity.....................................................................................17 3.0
M&A activity..................................................................................18 3.4
Insurance .........................................................................................7 4.2
Securitization...................................................................................3 6.0
6th pillar: Financial markets......................................................18 3.5
Foreign exchange markets .........................................................15 1.9
Derivatives markets .....................................................................18 3.3
Equity market development ........................................................10 4.6
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................46 2.9

Commercial access......................................................................51 2.9
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Korea, Rep.

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................37 .....n.................0.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services ......n/a .........................n/a Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................38 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................37 .....n.................4.1 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................47 .....n.................4.2 Sweden .................................5.9
1.06 Reliance on professional management .................................27 .....n.................4.9 Sweden .................................6.5
1.07 Willingness to delegate.........................................................48 .....n.................3.3 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................46 .....n.................4.3 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................32 .....n.................4.1 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................49 .....n.................3.8 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................39 .....n.................2.8 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................36 .....n.................2.9 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................39 .....n.................4.1 South Africa...........................6.0
1.14 Property rights.......................................................................31 .....n.................4.7 Switzerland ............................6.4
1.15 Intellectual property protection .............................................27 .....n.................4.1 Sweden .................................6.2
1.16 Diversion of public funds.......................................................29 .....n.................3.7 Sweden .................................6.5
1.17 Public trust of politicians .......................................................44 .....n.................2.1 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................23 .....n.................5.5 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................23 .....n.................9.0 Sweden ...............................15.0 171
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................54 .....n.................2.2 Singapore ..............................6.5
1.22 Judicial independence ...........................................................32 .....n.................4.0 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................34 .....n.................4.2 Sweden .................................6.8
1.24 Time to enforce a contract ......................................................2 .....n.............230.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................30 .....n...............35.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................35 .....n.................5.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................2 .....n ...............10.3 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................29 .....n.................4.5 Switzerland ............................6.1
2.02 Quality of math and science education...................................9 .....n.................5.1 Singapore ..............................6.5
2.03 Extent of staff training...........................................................28 .....n.................4.4 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................29 .....n.................4.6 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................23 .....n.................4.2 Switzerland ............................5.7
2.06 Tertiary enrollment ..................................................................1 .....n...............94.7 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................34 .....n.................4.9 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......40 .....n.................3.9 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................31 .....n.............250.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure..............................................11 .....n.................6.0 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................14 .....n.................6.7 Norway...................................7.0
2.13 Internet users .........................................................................7 .....n ...............76.5 Sweden ................................87.8
2.14 Broadband Internet subscribers ..............................................6 .....n...............32.1 Sweden................................41.2
2.15 Telephone lines......................................................................14 .....n...............44.3 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................34 .....n...............94.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................44 .....n ...............14.7 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Korea, Rep.
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................41 .....n.................5.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................5 .....n.................4.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................25 .....n ...............14.0 Australia.................................2.0
2.21 Time to register property.......................................................10 .....n................11.0 Multiple (3) ............................2.0
2.22 Time to close a business.......................................................16 .....n .................1.5 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................49 .....n ...............–3.2 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................19 .....n...............66.8 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................26 .....n .................1.7 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................18 .....n...............36.5 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................27 .....n .................1.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index ...........................................................25 .....n.................5.6 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................35 .....n .................7.7 Jordan..................................16.8
172 3.12 Output loss during banking crises.........................................47 .....n...............86.4 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................24 .....n ...............16.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................26 .....n ...............15.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ......................................8 .....n.................5.8 Panama..................................6.0
3.16 Manageability of public debt ................................................11 .....n...............23.5 Chile ......................................6.1
3.17 Credit default swap spreads .................................................25 .....n .............126.2 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................17 .....n .............114.3 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................21 .....n .................1.7 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................31 .....n...............55.8 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................30 .....n...............72.7 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................24 .....n...............89.8 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................32 .....n...............60.9 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................16 .....n.................0.8 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................24 .....n.................4.5 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................10 .....n .................1.4 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................41 .....n ...............21.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................31 .....n.................2.2 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................10 .....n...............93.8 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................19 .....n .................1.0 China ...................................22.0
5.02 IPO proceeds amount ...........................................................33 .....n.................0.2 Kazakhstan.............................1.1
5.03 Share of world IPOs ................................................................6 .....n.................5.8 China....................................12.6
 Korea, Rep.

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................15 .....n .................1.5 United States ......................36.0
5.05 M&A transaction value to GDP .............................................20 .....n.................5.3 Netherlands .........................14.2
5.06 Share of total number of M&A deals ......................................9 .....n.................3.5 United States ......................23.0
Insurance
5.07 Life insurance density .............................................................8 .....n.................6.9 Ireland..................................15.6
5.08 Non–life insurance density .....................................................5 .....n.................4.1 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................34 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ..........................................................8 .....n.................3.4 India.....................................55.4
5.11 Non–life insurance coverage..................................................10 .....n.................2.0 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................13 .....n .................1.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ..............................................................9 .....n.................3.0 United States.......................10.8
5.14 Share of total number of securitization deals .........................2 .....n.................5.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover.............................................11 .....n .................1.4 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................14 .....n .................1.2 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover...........................................19 .....n.................0.5 United Kingdom ..................40.8

Derivatives markets
173
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................23 .....n.................0.1 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................17 .....n.................0.3 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................18 .....n.................0.2 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ........6 .....n.................3.2 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................19 .....n.................0.3 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio .....................................................5 .....n .............194.4 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................20 .....n .............118.4 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP..........................................6 .....n .............276.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ...................12 .....n.................0.4 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................24 .....n ...............13.8 Ireland................................215.3
6.16 Public international bonds to GDP ........................................43 .....n.................0.7 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................45 .....n.................4.2 Switzerland ............................6.6
7.02 Venture capital availability......................................................50 .....n.................2.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................23 .....n.................3.3 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................39 .....n.................3.8 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................53 .....n.................2.1 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................48 .....n.................0.9 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................34 .....n ...............12.3 Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................27 .....n.................0.1 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Kuwait
Key indicators Financial assets by major type, 2008
5.7% 1.6%
Population (millions), 2009 .........................................................3.5 US$ bn
GDP (US$ billions), 2009 .........................................................111.3
n Public debt securities .........12.0
GDP (current prices) per capita, 2009 ............................31,482.0 n Private debt securities..........3.3
GDP (PPP) as share (%) of world total, 2009 ........................0.20 50.5% 42.3% n Banking deposits .................89.8
Compound annual growth rate of real GDP (%), 2005–09 ..2.22 n Equity securities ................107.2

Total 212.3

Total/GDP 134.2%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................28 3.7

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................37 3.9

Financial sector liberalization ....................................................39 3.7
Corporate governance.................................................................39 4.2
Legal and regulatory issues .......................................................43 3.3
Contract enforcement..................................................................32 4.3
2nd pillar: Business environment .............................................32 4.5
Human capital ...............................................................................51 3.5
174
Taxes...............................................................................................10 5.8
Infrastructure ................................................................................41 3.5
Cost of doing business ................................................................26 5.2
3rd pillar: Financial stability......................................................18 4.9
Currency stability..........................................................................11 5.1
Banking system stability..............................................................37 4.2
Risk of sovereign debt crisis ......................................................18 5.7
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................30 3.7

Size index .......................................................................................32 2.5
Efficiency index.............................................................................15 5.9
Financial information disclosure................................................39 1.9
5th pillar: Non-banking financial services .............................52 1.4
IPO activity.....................................................................................43 1.4
M&A activity..................................................................................45 1.3
Insurance .......................................................................................55 1.2
Securitization.................................................................................36 1.9
6th pillar: Financial markets........................................................9 4.4
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................12 4.4
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................41 3.0

Commercial access......................................................................44 3.2
Retail access.................................................................................28 2.8
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Kuwait

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................33 .....n .................1.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......41 .....n ...............27.7 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................41 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................30 .....n.................4.3 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................53 .....n.................4.1 Sweden .................................5.9
1.06 Reliance on professional management .................................53 .....n.................3.8 Sweden .................................6.5
1.07 Willingness to delegate.........................................................21 .....n.................4.2 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................38 .....n.................4.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................28 .....n.................4.4 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................44 .....n.................4.0 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................43 .....n.................2.7 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................49 .....n.................2.4 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................41 .....n.................4.0 South Africa...........................6.0
1.14 Property rights.......................................................................28 .....n.................4.9 Switzerland ............................6.4
1.15 Intellectual property protection .............................................28 .....n.................4.1 Sweden .................................6.2
1.16 Diversion of public funds.......................................................30 .....n.................3.6 Sweden .................................6.5
1.17 Public trust of politicians .......................................................24 .....n.................3.4 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................35 .....n.................4.1 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................46 .....n.................2.0 Sweden ...............................15.0 175
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................37 .....n.................3.3 Singapore ..............................6.5
1.22 Judicial independence ...........................................................22 .....n.................4.9 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................24 .....n.................5.3 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................36 .....n.............566.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................57 .....n...............50.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................18 .....n.................6.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts ...................................................18 .....n...............18.8 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................48 .....n.................3.7 Switzerland ............................6.1
2.02 Quality of math and science education.................................40 .....n.................3.5 Singapore ..............................6.5
2.03 Extent of staff training...........................................................49 .....n.................3.6 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................47 .....n.................4.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................20 .....n.................4.5 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................49 .....n................17.6 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................24 .....n.................5.6 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition .......10 .....n.................4.9 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................10 .....n .............–10.7 China..................................–24.6
2.10 Time to pay taxes ..................................................................12 .....n .............118.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................28 .....n.................4.9 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................51 .....n.................5.4 Norway...................................7.0
2.13 Internet users .......................................................................33 .....n...............34.3 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................49 .....n .................1.4 Sweden................................41.2
2.15 Telephone lines......................................................................41 .....n...............18.5 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................31 .....n...............99.6 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business....................................................12 .....n .................1.0 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Kuwait
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ....................................................6 .....n.................0.5 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................1 .....n .................1.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................48 .....n...............35.0 Australia.................................2.0
2.21 Time to register property ......................................................45 .....n...............55.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................48 .....n.................4.2 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................20 .....n.................2.2 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................25 .....n...............83.5 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP.............................................1 .....n ...............37.1 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .......................5 .....n...............20.7 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................14 .....n.................0.8 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................10 .....n ...............12.4 Jordan..................................16.8
176 3.12 Output loss during banking crises.........................................54 .....n..............107.6 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................21 .....n................17.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................20 .....n................17.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................40 .....n.................4.6 Panama..................................6.0
3.16 Manageability of public debt ..................................................3 .....n.................9.5 Chile ......................................6.1
3.17 Credit default swap spreads.................................................n/a .........................n/a Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................32 .....n...............70.4 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................30 .....n...............58.9 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................27 .....n ...............77.2 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................30 .....n ...............74.2 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................34 .....n...............60.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ..............................................5 .....n.................6.1 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................21 .....n.................2.1 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................44 .....n...............26.7 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................20 .....n .................1.5 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................32 .....n...............30.4 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................44 .....n.................0.2 China ...................................22.0
5.02 IPO proceeds amount ...........................................................31 .....n.................0.2 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................51 .....n.................0.1 China....................................12.6
 Kuwait

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................46 .....n.................0.1 United States ......................36.0
5.05 M&A transaction value to GDP .............................................40 .....n.................2.5 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................50 .....n.................0.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................54 .....n.................0.1 Ireland..................................15.6
5.08 Non–life insurance density ...................................................56 .....n.................0.3 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ..........................n/a .........................n/a China .....................................0.3
5.10 Life insurance coverage ........................................................57 .....n.................0.0 India.....................................55.4
5.11 Non–life insurance coverage .................................................57 .....n.................0.0 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................38 .....n.................0.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................26 .....n .................1.4 United States.......................10.8
5.14 Share of total number of securitization deals .......................44 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
177
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................19 .....n...............95.7 Italy....................................348.2
6.10 Stock market capitalization to GDP ......................................n/a .........................n/a Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people.....................8 .....n.................0.7 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................40 .....n.................3.0 Ireland................................215.3
6.16 Public international bonds to GDP ........................................51 .....n.................0.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................40 .....n.................4.5 Switzerland ............................6.6
7.02 Venture capital availability......................................................17 .....n.................3.4 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................36 .....n.................2.7 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................29 .....n.................3.9 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................18 .....n.................3.6 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................53 .....n.................0.1 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................26 .....n ...............16.5 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................24 .....n...............53.4 Canada...............................218.5
7.10 Total number of point of sale (POS) devices .........................17 .....n..........1,040.1 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Malaysia
Key indicators Financial assets by major type, 2008
14.2%
Population (millions), 2009 .......................................................27.8 US$ bn
28.9%
GDP (US$ billions), 2009 .........................................................191.5
n Public debt securities .........91.7
GDP (current prices) per capita, 2009 ..............................6,896.7 n Private debt securities......127.8
19.8%
GDP (PPP) as share (%) of world total, 2009 ........................0.54 n Banking deposits ...............239.7
Compound annual growth rate of real GDP (%), 2005–09 ..2.94 n Equity securities ................187.1

Total 646.2
37.1%
Total/GDP 291.6%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................17 4.2

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................20 5.1

Financial sector liberalization ....................................................26 5.8
Corporate governance.................................................................18 5.0
Legal and regulatory issues .......................................................21 4.4
Contract enforcement..................................................................19 5.1
2nd pillar: Business environment .............................................30 4.6
Human capital ...............................................................................28 4.4
178
Taxes...............................................................................................18 5.2
Infrastructure ................................................................................30 4.1
Cost of doing business ................................................................41 4.6
3rd pillar: Financial stability........................................................3 5.7
Currency stability............................................................................1 6.5
Banking system stability..............................................................13 5.3
Risk of sovereign debt crisis ......................................................23 5.4
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................12 4.7

Size index .......................................................................................17 3.7
Efficiency index.............................................................................30 5.1
Financial information disclosure..................................................1 5.8
5th pillar: Non-banking financial services .............................18 3.2
IPO activity.....................................................................................10 3.4
M&A activity..................................................................................13 3.7
Insurance .......................................................................................22 2.9
Securitization.................................................................................23 2.6
6th pillar: Financial markets......................................................25 2.6
Foreign exchange markets .........................................................37 1.1
Derivatives markets .....................................................................34 1.1
Equity market development ........................................................15 3.8
Bond market development..........................................................16 3.5
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................20 3.6

Commercial access........................................................................9 4.2
Retail access.................................................................................25 3.0
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Malaysia

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................31 .....n .................1.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......24 .....n...............44.6 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................10 .....n.................4.7 Canada...................................5.2
1.05 Efficacy of corporate boards..................................................13 .....n.................5.2 Sweden .................................5.9
1.06 Reliance on professional management .................................19 .....n.................5.3 Sweden .................................6.5
1.07 Willingness to delegate .........................................................14 .....n.................4.6 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................21 .....n.................5.4 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................25 .....n.................4.7 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................16 .....n.................5.0 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation ...........................................7 .....n.................4.0 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................21 .....n.................3.6 Switzerland ............................5.6
1.13 Regulation of securities exchanges .......................................14 .....n.................5.2 South Africa...........................6.0
1.14 Property rights.......................................................................25 .....n.................5.1 Switzerland ............................6.4
1.15 Intellectual property protection .............................................23 .....n.................4.7 Sweden .................................6.2
1.16 Diversion of public funds.......................................................26 .....n.................4.1 Sweden .................................6.5
1.17 Public trust of politicians .......................................................20 .....n.................3.8 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................30 .....n.................4.5 Denmark................................9.3
1.19 Strength of legal rights index ..................................................1 .....n ...............10.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................36 .....n.................6.0 Sweden ...............................15.0 179
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................12 .....n.................4.6 Singapore ..............................6.5
1.22 Judicial independence ...........................................................28 .....n.................4.3 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................32 .....n.................4.4 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................39 .....n.............585.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract ........................11 .....n...............30.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................3 .....n.................8.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................37 .....n ...............27.5 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................24 .....n.................4.7 Switzerland ............................6.1
2.02 Quality of math and science education .................................17 .....n.................4.8 Singapore ..............................6.5
2.03 Extent of staff training...........................................................12 .....n.................5.0 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................22 .....n.................5.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................21 .....n.................4.3 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................42 .....n...............30.2 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................33 .....n.................5.0 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......29 .....n.................4.1 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes ..................................................................17 .....n .............145.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................20 .....n.................5.5 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................41 .....n.................6.0 Norway...................................7.0
2.13 Internet users .......................................................................25 .....n...............55.8 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................38 .....n.................4.9 Sweden................................41.2
2.15 Telephone lines......................................................................44 .....n ...............15.9 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................29 .....n .............102.6 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................40 .....n................11.9 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Malaysia
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................22 .....n.................2.6 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................31 .....n ...............15.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................18 .....n................11.0 Australia.................................2.0
2.21 Time to register property ......................................................54 .....n .............144.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................29 .....n.................2.3 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .......................4 .....n.................9.1 Venezuela ............................14.5
3.02 External vulnerability indicator.................................................8 .....n...............29.6 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP.............................................5 .....n ...............16.6 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies)......................17 .....n...............34.9 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................27 .....n .................1.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles.............................4 .....n.................6.7 Ireland....................................6.8
3.10 Financial Stress Index .............................................................7 .....n.................0.6 Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................17 .....n................11.4 Jordan..................................16.8
180 3.12 Output loss during banking crises.........................................36 .....n ...............47.2 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................24 .....n ...............16.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................30 .....n ...............14.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ......................................6 .....n.................5.8 Panama..................................6.0
3.16 Manageability of public debt ................................................38 .....n...............53.7 Chile ......................................6.1
3.17 Credit default swap spreads .................................................21 .....n .............100.1 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................20 .....n .............102.6 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................30 .....n.................0.8 Egypt ...................................23.8
4.03 Financial system deposits to GDP ..........................................9 .....n .............109.4 Hong Kong SAR ................285.2
4.04 M2 to GDP ..............................................................................6 .....n .............146.7 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................18 .....n...............96.4 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................10 .....n .............109.4 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................21 .....n.................4.6 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................17 .....n .................1.7 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................50 .....n...............39.9 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................26 .....n .................1.7 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................19 .....n.................3.8 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................13 .....n...............82.0 Argentina ...........................100.0
4.14 Public credit registry coverage ................................................3 .....n...............48.5 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................21 .....n.................0.9 China ...................................22.0
5.02 IPO proceeds amount .............................................................7 .....n.................0.8 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................12 .....n.................2.2 China....................................12.6
 Malaysia

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................22 .....n.................0.7 United States ......................36.0
5.05 M&A transaction value to GDP ...............................................5 .....n................11.4 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................13 .....n.................2.0 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................21 .....n.................3.0 Ireland..................................15.6
5.08 Non–life insurance density ...................................................36 .....n .................1.6 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................23 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage.........................................................19 .....n.................0.8 India.....................................55.4
5.11 Non–life insurance coverage .................................................31 .....n.................0.5 China....................................14.6
5.12 Relative value-added of insurance to GDP ..............................8 .....n.................2.6 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................18 .....n.................2.0 United States.......................10.8
5.14 Share of total number of securitization deals .......................25 .....n.................0.4 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................33 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................34 .....n.................0.1 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................34 .....n.................0.1 United Kingdom ..................40.8

Derivatives markets
181
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................28 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................31 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................29 .....n.................0.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......30 .....n.................0.1 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................36 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................24 .....n...............78.3 Italy....................................348.2
6.10 Stock market capitalization to GDP .........................................5 .....n.............180.3 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ...................11 .....n.................0.4 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............11 .....n...............50.4 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............14 .....n...............43.2 Japan .................................184.6
6.15 Private international bonds to GDP .......................................23 .....n ...............16.2 Ireland................................215.3
6.16 Public international bonds to GDP ........................................37 .....n .................1.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ....................9 .....n.................2.4 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................24 .....n.................5.4 Switzerland ............................6.6
7.02 Venture capital availability........................................................6 .....n.................3.9 Hong Kong SAR ....................4.4
7.03 Ease of access to credit..........................................................3 .....n.................4.2 Indonesia ...............................4.3
7.04 Financing through local equity market ....................................8 .....n.................4.7 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ..........................................................8 .....n.................4.2 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................26 .....n.................4.2 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts .....................................8 .....n......206,332.8 Japan............................717,241.6
7.08 Commercial bank branches ...................................................36 .....n................11.4 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................23 .....n...............54.0 Canada...............................218.5
7.10 Total number of point of sale (POS) devices .........................16 .....n..........1,063.1 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................10 .....n .................7.8 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Mexico
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .....................................................107.6 22.5% US$ bn
GDP (US$ billions), 2009 .........................................................874.9
37.7% n Public debt securities .......389.2
GDP (current prices) per capita, 2009 ..............................8,134.7 n Private debt securities......208.4
GDP (PPP) as share (%) of world total, 2009 ........................2.09 n Banking deposits ...............203.3
Compound annual growth rate of real GDP (%), 2005–09 ..0.57 19.7%
n Equity securities ................232.6

Total 1,033.4
20.2%
Total/GDP 94.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................43 3.1

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................48 3.5

Financial sector liberalization ....................................................42 3.3
Corporate governance.................................................................47 3.9
Legal and regulatory issues .......................................................49 3.1
Contract enforcement..................................................................42 3.8
2nd pillar: Business environment .............................................46 3.9
Human capital ...............................................................................50 3.5
182
Taxes...............................................................................................43 4.0
Infrastructure ................................................................................45 3.2
Cost of doing business ................................................................36 4.9
3rd pillar: Financial stability......................................................15 5.0
Currency stability..........................................................................17 4.6
Banking system stability..............................................................12 5.3
Risk of sovereign debt crisis ......................................................33 4.9
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................52 2.6

Size index .......................................................................................53 1.0
Efficiency index.............................................................................50 3.8
Financial information disclosure................................................21 3.3
5th pillar: Non-banking financial services .............................39 2.0
IPO activity.....................................................................................39 1.5
M&A activity..................................................................................43 1.4
Insurance .......................................................................................45 2.1
Securitization.................................................................................19 2.9
6th pillar: Financial markets......................................................47 1.6
Foreign exchange markets .........................................................23 1.3
Derivatives markets .....................................................................29 1.5
Equity market development ........................................................47 1.5
Bond market development..........................................................32 2.0
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................42 3.0

Commercial access......................................................................52 2.8
Retail access.................................................................................23 3.1
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Mexico

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................36 .....n .................1.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......47 .....n ...............16.7 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................33 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................51 .....n.................3.6 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................51 .....n.................4.1 Sweden .................................5.9
1.06 Reliance on professional management .................................52 .....n.................3.8 Sweden .................................6.5
1.07 Willingness to delegate.........................................................47 .....n.................3.3 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................39 .....n.................4.7 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................46 .....n.................3.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................43 .....n.................4.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................42 .....n.................2.7 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................32 .....n.................3.0 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................47 .....n.................3.8 South Africa...........................6.0
1.14 Property rights.......................................................................45 .....n.................3.9 Switzerland ............................6.4
1.15 Intellectual property protection .............................................43 .....n.................3.1 Sweden .................................6.2
1.16 Diversion of public funds.......................................................45 .....n.................2.8 Sweden .................................6.5
1.17 Public trust of politicians .......................................................41 .....n.................2.2 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................44 .....n.................3.3 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................33 .....n .................7.0 Sweden ...............................15.0 183
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................50 .....n.................2.5 Singapore ..............................6.5
1.22 Judicial independence ...........................................................48 .....n.................3.2 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................51 .....n.................3.0 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................20 .....n .............415.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................39 .....n...............38.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................21 .....n.................6.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................46 .....n...............32.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................31 .....n.................4.5 Switzerland ............................6.1
2.02 Quality of math and science education.................................54 .....n.................2.6 Singapore ..............................6.5
2.03 Extent of staff training...........................................................42 .....n.................3.8 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................38 .....n.................4.3 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................46 .....n.................3.5 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................46 .....n...............26.9 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................37 .....n.................4.6 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......47 .....n.................3.7 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................23 .....n .................1.3 China..................................–24.6
2.10 Time to pay taxes..................................................................50 .....n..............517.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................42 .....n.................3.9 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................38 .....n.................6.1 Norway...................................7.0
2.13 Internet users .......................................................................47 .....n ...............21.7 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................33 .....n .................7.0 Sweden................................41.2
2.15 Telephone lines......................................................................40 .....n ...............19.0 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................49 .....n...............69.4 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................39 .....n................11.7 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Mexico
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................42 .....n.................5.2 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................39 .....n...............18.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................21 .....n ...............13.0 Australia.................................2.0
2.21 Time to register property ......................................................48 .....n ...............74.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................21 .....n .................1.8 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................43 .....n ...............–1.2 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................14 .....n...............40.0 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................33 .....n ...............–1.0 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................28 .....n................11.4 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .......................6 .....n...............22.1 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles.............................7 .....n.................6.3 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................21 .....n.................4.8 Thailand ...............................–0.2
3.11 Tier 1 capital ratio....................................................................5 .....n ...............13.5 Jordan..................................16.8
184 3.12 Output loss during banking crises.........................................30 .....n ...............37.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................31 .....n ...............15.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................34 .....n ...............12.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................31 .....n.................5.0 Panama..................................6.0
3.16 Manageability of public debt ................................................22 .....n...............39.1 Chile ......................................6.1
3.17 Credit default swap spreads .................................................30 .....n .............134.3 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................47 .....n...............33.5 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................50 .....n...............22.1 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................56 .....n...............30.5 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................50 .....n...............23.5 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................53 .....n ...............21.9 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................24 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................57 .....n .................1.3 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................57 .....n...............20.9 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................24 .....n.................3.3 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................44 .....n.................3.1 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................18 .....n.................3.4 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................14 .....n ...............77.5 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................24 .....n.................0.9 China ...................................22.0
5.02 IPO proceeds amount ...........................................................39 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................40 .....n.................0.2 China....................................12.6
 Mexico

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................25 .....n.................0.5 United States ......................36.0
5.05 M&A transaction value to GDP .............................................49 .....n .................1.6 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................31 .....n.................0.4 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................38 .....n.................0.9 Ireland..................................15.6
5.08 Non–life insurance density ...................................................43 .....n .................1.1 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................18 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage.........................................................17 .....n.................0.9 India.....................................55.4
5.11 Non–life insurance coverage .................................................16 .....n .................1.2 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................54 .....n.................0.3 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................28 .....n .................1.3 United States.......................10.8
5.14 Share of total number of securitization deals........................11 .....n .................1.3 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................22 .....n.................0.4 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................32 .....n.................0.1 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................21 .....n.................0.5 United Kingdom ..................40.8

Derivatives markets
185
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................24 .....n.................0.1 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................20 .....n.................0.2 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................21 .....n.................0.1 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......34 .....n.................0.0 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................26 .....n.................0.1 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................39 .....n ...............37.5 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................39 .....n ...............51.5 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................36 .....n................17.2 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................50 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............23 .....n................17.7 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............32 .....n...............22.8 Japan .................................184.6
6.15 Private international bonds to GDP .......................................30 .....n.................6.1 Ireland................................215.3
6.16 Public international bonds to GDP ........................................22 .....n.................5.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................27 .....n.................0.5 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................37 .....n.................4.6 Switzerland ............................6.6
7.02 Venture capital availability......................................................48 .....n.................2.3 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................46 .....n.................2.5 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................49 .....n.................3.0 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................48 .....n.................2.4 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................42 .....n.................2.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................20 .....n ......109,676.3 Japan............................717,241.6
7.08 Commercial bank branches ...................................................29 .....n ...............14.7 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................31 .....n...............44.8 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................23 .....n.............592.1 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .......................................................................4 .....n ...............21.0 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Morocco
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................31.7 US$ bn
26.7%
GDP (US$ billions), 2009 ...........................................................90.8
34.8% n Public debt securities .........50.5
GDP (current prices) per capita, 2009 ..............................2,864.5 n Private debt securities.........n/a
GDP (PPP) as share (%) of world total, 2009 ........................0.21 n Banking deposits .................72.8
Compound annual growth rate of real GDP (%), 2005–09 ..4.22 n Equity securities ..................65.7

Total 189.0
38.5%
Total/GDP 212.7%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................41 3.2

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................49 3.4

Financial sector liberalization ....................................................50 2.7
Corporate governance.................................................................46 4.0
Legal and regulatory issues .......................................................40 3.4
Contract enforcement..................................................................47 3.5
2nd pillar: Business environment .............................................41 4.0
Human capital ...............................................................................49 3.6
186
Taxes...............................................................................................47 3.9
Infrastructure ................................................................................37 3.6
Cost of doing business ................................................................33 5.0
3rd pillar: Financial stability......................................................16 5.0
Currency stability..........................................................................14 4.9
Banking system stability..............................................................10 5.4
Risk of sovereign debt crisis ......................................................38 4.4
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................32 3.6

Size index .......................................................................................26 2.9
Efficiency index.............................................................................22 5.4
Financial information disclosure................................................46 1.4
5th pillar: Non-banking financial services .............................42 1.9
IPO activity.....................................................................................21 2.3
M&A activity..................................................................................47 1.3
Insurance .......................................................................................32 2.7
Securitization.................................................................................44 1.4
6th pillar: Financial markets......................................................45 1.6
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................36 2.1
Bond market development..........................................................46 1.2
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................45 2.9

Commercial access......................................................................33 3.5
Retail access.................................................................................33 2.3
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Morocco

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................49 .....n ...............–1.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......42 .....n...............39.5 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................36 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................45 .....n.................4.0 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................32 .....n.................4.6 Sweden .................................5.9
1.06 Reliance on professional management .................................54 .....n.................3.7 Sweden .................................6.5
1.07 Willingness to delegate.........................................................50 .....n.................3.2 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................49 .....n.................4.2 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................38 .....n.................3.8 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................32 .....n.................4.5 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................22 .....n.................3.4 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................33 .....n.................3.0 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................27 .....n.................4.7 South Africa...........................6.0
1.14 Property rights.......................................................................35 .....n.................4.4 Switzerland ............................6.4
1.15 Intellectual property protection .............................................40 .....n.................3.4 Sweden .................................6.2
1.16 Diversion of public funds.......................................................32 .....n.................3.4 Sweden .................................6.5
1.17 Public trust of politicians .......................................................31 .....n.................3.1 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................44 .....n.................3.3 Denmark................................9.3
1.19 Strength of legal rights index ................................................50 .....n.................3.0 Multiple (3)...........................10.0
1.20 Central bank transparency....................................................n/a .........................n/a Sweden ...............................15.0 187
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................30 .....n.................3.7 Singapore ..............................6.5
1.22 Judicial independence ...........................................................42 .....n.................3.5 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................43 .....n.................3.3 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................43 .....n .............615.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................46 .....n...............40.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................54 .....n.................3.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................30 .....n...............25.2 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................30 .....n.................4.5 Switzerland ............................6.1
2.02 Quality of math and science education.................................37 .....n.................4.0 Singapore ..............................6.5
2.03 Extent of staff training...........................................................44 .....n.................3.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................40 .....n.................4.2 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................39 .....n.................3.8 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................53 .....n ...............12.3 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................49 .....n.................3.6 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......34 .....n.................4.0 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................29 .....n .................7.8 China..................................–24.6
2.10 Time to pay taxes..................................................................43 .....n.............358.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................38 .....n.................4.1 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................33 .....n.................6.3 Norway...................................7.0
2.13 Internet users .......................................................................34 .....n...............33.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................47 .....n .................1.5 Sweden................................41.2
2.15 Telephone lines......................................................................50 .....n.................9.5 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................15 .....n .............124.8 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................46 .....n ...............16.1 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Morocco
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................36 .....n.................4.9 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................39 .....n...............18.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................19 .....n ...............12.0 Australia.................................2.0
2.21 Time to register property ......................................................40 .....n ...............47.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................21 .....n .................1.8 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................32 .....n.................0.6 Venezuela ............................14.5
3.02 External vulnerability indicator.................................................7 .....n ...............27.8 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................42 .....n ...............–3.4 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................26 .....n.................3.6 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................13 .....n...............26.8 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises ..................................................11 .....n.................0.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................32 .....n.................4.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................33 .....n.................4.6 Ireland....................................6.8
3.10 Financial Stress Index .............................................................5 .....n.................0.4 Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
188 3.12 Output loss during banking crises.........................................26 .....n................11.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................35 .....n ...............13.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................36 .....n................11.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................30 .....n.................5.0 Panama..................................6.0
3.16 Manageability of public debt ................................................39 .....n ...............57.2 Chile ......................................6.1
3.17 Credit default swap spreads .................................................24 .....n .............124.6 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................29 .....n ...............81.4 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................18 .....n.................2.0 Egypt ...................................23.8
4.03 Financial system deposits to GDP.........................................17 .....n...............85.9 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................17 .....n .............102.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................31 .....n...............69.8 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................18 .....n...............85.2 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................28 .....n.................4.4 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................11 .....n .................1.4 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................33 .....n.................9.4 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................33 .....n.................2.3 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................28 .....n.................5.5 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................39 .....n ...............14.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................37 .....n.................0.3 China ...................................22.0
5.02 IPO proceeds amount ...........................................................10 .....n.................0.5 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................26 .....n.................0.5 China....................................12.6
 Morocco

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................49 .....n.................0.1 United States ......................36.0
5.05 M&A transaction value to GDP .............................................43 .....n.................2.2 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................53 .....n.................0.0 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................37 .....n.................0.9 Ireland..................................15.6
5.08 Non–life insurance density ...................................................30 .....n .................1.9 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................14 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................34 .....n.................0.3 India.....................................55.4
5.11 Non–life insurance coverage .................................................28 .....n.................0.6 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................16 .....n .................1.7 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................42 .....n.................0.7 United States.......................10.8
5.14 Share of total number of securitization deals .......................52 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
189
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................36 .....n...............45.1 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................19 .....n .............124.0 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................32 .....n...............35.9 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................40 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................54 .....n.................0.0 Ireland................................215.3
6.16 Public international bonds to GDP ........................................42 .....n.................0.8 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................32 .....n.................0.2 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................41 .....n.................4.5 Switzerland ............................6.6
7.02 Venture capital availability......................................................27 .....n.................3.0 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................13 .....n.................3.7 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................21 .....n.................4.2 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................29 .....n.................3.1 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................41 .....n.................2.6 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................37 .....n ........26,527.9 Japan............................717,241.6
7.08 Commercial bank branches ...................................................40 .....n.................9.9 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................42 .....n...............18.6 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................31 .....n...............89.9 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .......................................................................3 .....n...............22.6 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Netherlands
Key indicators Financial assets by major type, 2008
10.2% 13.4%
Population (millions), 2009 .......................................................16.5 US$ bn
GDP (US$ billions), 2009 .........................................................794.8
n Public debt securities .......510.2
GDP (current prices) per capita, 2009 ............................48,222.9 n Private debt securities...1,864.8
GDP (PPP) as share (%) of world total, 2009 ........................0.95 27.6% n Banking deposits ............1,051.0
Compound annual growth rate of real GDP (%), 2005–09 ..0.96 n Equity securities ................387.9

48.9% Total 3,814.0

Total/GDP 434.9%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index........................................................7 4.7

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment ...........................................9 5.8

Financial sector liberalization ......................................................1 7.0
Corporate governance...................................................................7 5.5
Legal and regulatory issues .........................................................9 5.2
Contract enforcement..................................................................17 5.4
2nd pillar: Business environment ...............................................8 5.7
Human capital .................................................................................9 5.3
190
Taxes.................................................................................................9 5.8
Infrastructure ................................................................................13 5.5
Cost of doing business ................................................................11 6.0
3rd pillar: Financial stability......................................................31 4.5
Currency stability..........................................................................22 4.3
Banking system stability..............................................................45 3.8
Risk of sovereign debt crisis ......................................................17 5.7
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services........................................2 5.3

Size index .........................................................................................3 5.6
Efficiency index...............................................................................9 6.0
Financial information disclosure................................................18 3.5
5th pillar: Non-banking financial services ...............................9 3.6
IPO activity.....................................................................................40 1.4
M&A activity....................................................................................7 4.9
Insurance .......................................................................................12 3.5
Securitization...................................................................................6 4.7
6th pillar: Financial markets........................................................8 4.5
Foreign exchange markets .........................................................18 1.7
Derivatives markets .....................................................................16 4.0
Equity market development ..........................................................1 5.9
Bond market development............................................................2 5.3
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................19 3.7

Commercial access......................................................................35 3.4
Retail access.................................................................................13 4.0
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Netherlands

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n ...............74.6 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................17 .....n.................4.5 Canada...................................5.2
1.05 Efficacy of corporate boards ...................................................8 .....n.................5.3 Sweden .................................5.9
1.06 Reliance on professional management ...................................5 .....n.................6.0 Sweden .................................6.5
1.07 Willingness to delegate...........................................................4 .....n.................5.7 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .........................9 .....n.................5.8 South Africa...........................6.4
1.09 Ethical behavior of firms..........................................................8 .....n.................6.3 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................11 .....n.................5.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................26 .....n.................3.1 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................14 .....n.................3.9 Switzerland ............................5.6
1.13 Regulation of securities exchanges .......................................15 .....n.................5.2 South Africa...........................6.0
1.14 Property rights .......................................................................13 .....n.................5.8 Switzerland ............................6.4
1.15 Intellectual property protection ...............................................7 .....n.................5.7 Sweden .................................6.2
1.16 Diversion of public funds.........................................................8 .....n.................5.9 Sweden .................................6.5
1.17 Public trust of politicians .........................................................9 .....n.................5.0 Singapore ..............................6.4
1.18 Corruption perceptions index ..................................................5 .....n.................8.9 Denmark................................9.3
1.19 Strength of legal rights index ................................................30 .....n.................6.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 191
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................14 .....n.................4.6 Singapore ..............................6.5
1.22 Judicial independence ...........................................................10 .....n.................6.2 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................14 .....n.................6.3 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................31 .....n .............514.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................4 .....n...............25.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................44 .....n.................4.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................29 .....n...............24.4 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................10 .....n.................5.5 Switzerland ............................6.1
2.02 Quality of math and science education...................................8 .....n.................5.2 Singapore ..............................6.5
2.03 Extent of staff training ...........................................................10 .....n.................5.1 Sweden .................................5.7
2.04 Local availability of specialized research
and training services ...............................................................4 .....n.................6.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ............................8 .....n.................4.9 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................20 .....n...............60.3 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................14 .....n.................6.2 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition .......13 .....n.................4.8 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes ..................................................................19 .....n .............164.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................14 .....n.................5.9 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................16 .....n.................6.6 Norway...................................7.0
2.13 Internet users .........................................................................2 .....n...............86.6 Sweden ................................87.8
2.14 Broadband Internet subscribers ..............................................3 .....n...............35.1 Sweden................................41.2
2.15 Telephone lines......................................................................15 .....n...............44.3 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................55 .....n ...............41.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................25 .....n.................5.6 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Netherlands
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................45 .....n.................6.2 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................5 .....n.................4.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................15 .....n ...............10.0 Australia.................................2.0
2.21 Time to register property ........................................................5 .....n.................5.0 Multiple (3) ............................2.0
2.22 Time to close a business.......................................................11 .....n .................1.1 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................30 .....n.................0.7 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................14 .....n.................6.2 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies).............................................................5 .....n...............18.6 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ...........................10 .....n.................6.2 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................37 .....n ...............13.5 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................36 .....n .................7.6 Jordan..................................16.8
192 3.12 Output loss during banking crises.........................................38 .....n...............50.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................44 .....n.................4.4 Panama..................................6.0
3.16 Manageability of public debt ................................................42 .....n ...............61.0 Chile ......................................6.1
3.17 Credit default swap spreads ...................................................8 .....n ...............47.3 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .......................................3 .....n.............200.8 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................37 .....n.................0.2 Egypt ...................................23.8
4.03 Financial system deposits to GDP ..........................................6 .....n .............122.8 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................10 .....n .............139.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP...............................................................4 .....n .............192.6 United States.....................210.7
4.06 Bank deposits to GDP .............................................................7 .....n .............122.0 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ........................................2 .....n................11.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ..............................................1 .....n.................6.5 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................50 .....n.................5.3 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................21 .....n.................2.3 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................12 .....n .................1.1 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................12 .....n...............83.5 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................27 .....n.................0.7 China ...................................22.0
5.02 IPO proceeds amount ...........................................................38 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................33 .....n.................0.3 China....................................12.6
 Netherlands

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ..................................................................9 .....n.................3.4 United States ......................36.0
5.05 M&A transaction value to GDP ...............................................1 .....n ...............14.2 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................17 .....n .................1.3 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................16 .....n.................4.2 Ireland..................................15.6
5.08 Non–life insurance density .....................................................1 .....n.................9.4 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................30 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................22 .....n.................0.7 India.....................................55.4
5.11 Non–life insurance coverage..................................................11 .....n .................1.5 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................18 .....n .................1.6 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ..............................................................3 .....n.................5.0 United States.......................10.8
5.14 Share of total number of securitization deals........................17 .....n.................0.8 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................27 .....n.................0.2 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................13 .....n .................1.3 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover...........................................17 .....n.................0.7 United Kingdom ..................40.8

Derivatives markets
193
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................17 .....n.................0.3 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps................................8 .....n .................1.6 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................16 .....n.................0.2 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......13 .....n .................1.0 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................18 .....n.................0.3 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio .....................................................3 .....n.............252.2 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................16 .....n .............129.9 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP..........................................3 .....n.............344.4 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ..................n/a .........................n/a Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ..............5 .....n...............75.0 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP ...............8 .....n...............48.1 Japan .................................184.6
6.15 Private international bonds to GDP .........................................2 .....n .............149.3 Ireland................................215.3
6.16 Public international bonds to GDP ........................................26 .....n.................3.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ....................6 .....n.................3.0 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................12 .....n.................6.1 Switzerland ............................6.6
7.02 Venture capital availability......................................................13 .....n.................3.7 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................52 .....n.................2.1 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................41 .....n.................3.7 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................14 .....n.................3.7 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................55 .....n ...............–0.4 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................12 .....n ......176,579.2 Japan............................717,241.6
7.08 Commercial bank branches ...................................................15 .....n...............25.4 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................19 .....n...............64.1 Canada...............................218.5
7.10 Total number of point of sale (POS) devices...........................8 .....n..........2,343.4 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Nigeria
Key indicators Financial assets by major type, 2008
13.7%
Population (millions), 2009 .....................................................151.9 US$ bn
0.4%
GDP (US$ billions), 2009 .........................................................173.4
n Public debt securities .........17.8
38.3%
GDP (current prices) per capita, 2009 ..............................1,141.9 n Private debt securities..........0.5
GDP (PPP) as share (%) of world total, 2009 ........................0.48 n Banking deposits .................62.0
Compound annual growth rate of real GDP (%), 2005–09 ..4.93 n Equity securities ..................49.8

47.6% Total 130.1

Total/GDP 62.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................57 2.4

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................43 3.6

Financial sector liberalization ....................................................34 3.9
Corporate governance.................................................................52 3.8
Legal and regulatory issues .......................................................51 3.0
Contract enforcement..................................................................39 3.9
2nd pillar: Business environment .............................................56 2.8
Human capital ...............................................................................55 3.2
194
Taxes...............................................................................................57 2.3
Infrastructure ................................................................................54 2.8
Cost of doing business ................................................................54 3.0
3rd pillar: Financial stability......................................................56 3.1
Currency stability........................................................................n/a n/a
Banking system stability............................................................n/a n/a
Risk of sovereign debt crisis ......................................................51 3.1
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................53 2.4

Size index .......................................................................................50 1.2
Efficiency index.............................................................................41 4.4
Financial information disclosure................................................56 1.0
5th pillar: Non-banking financial services .............................55 1.3
IPO activity.....................................................................................35 1.6
M&A activity..................................................................................56 1.0
Insurance .......................................................................................56 1.2
Securitization.................................................................................49 1.2
6th pillar: Financial markets......................................................55 1.2
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................52 1.2
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................52 2.6

Commercial access......................................................................31 3.5
Retail access.................................................................................45 1.6
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Nigeria

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................47 .....n ...............–0.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......30 .....n ...............51.1 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................28 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................50 .....n.................3.7 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................50 .....n.................4.1 Sweden .................................5.9
1.06 Reliance on professional management .................................40 .....n.................4.3 Sweden .................................6.5
1.07 Willingness to delegate.........................................................30 .....n.................4.0 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................57 .....n.................3.4 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................54 .....n.................3.1 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................51 .....n.................3.6 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................30 .....n.................3.1 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................42 .....n.................2.8 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................43 .....n.................4.0 South Africa...........................6.0
1.14 Property rights.......................................................................53 .....n.................3.3 Switzerland ............................6.4
1.15 Intellectual property protection .............................................47 .....n.................2.9 Sweden .................................6.2
1.16 Diversion of public funds.......................................................53 .....n.................2.2 Sweden .................................6.5
1.17 Public trust of politicians .......................................................51 .....n .................1.8 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................51 .....n.................2.5 Denmark................................9.3
1.19 Strength of legal rights index ................................................12 .....n.................8.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................40 .....n.................4.0 Sweden ...............................15.0 195
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................36 .....n.................3.3 Singapore ..............................6.5
1.22 Judicial independence ...........................................................43 .....n.................3.5 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................41 .....n.................3.5 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................24 .....n .............457.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................43 .....n...............39.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................27 .....n.................5.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................46 .....n...............32.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................50 .....n.................3.7 Switzerland ............................6.1
2.02 Quality of math and science education.................................50 .....n.................2.9 Singapore ..............................6.5
2.03 Extent of staff training...........................................................38 .....n.................3.9 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................52 .....n.................3.7 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................35 .....n.................3.9 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................54 .....n ...............10.2 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................54 .....n.................3.0 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......43 .....n.................3.9 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................40 .....n...............20.3 China..................................–24.6
2.10 Time to pay taxes..................................................................55 .....n.............938.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................56 .....n.................2.4 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................37 .....n.................6.1 Norway...................................7.0
2.13 Internet users .......................................................................49 .....n ...............15.9 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................56 .....n.................0.0 Sweden................................41.2
2.15 Telephone lines......................................................................56 .....n.................0.9 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................27 .....n .............110.2 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................57 .....n ...............76.7 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Nigeria
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................57 .....n...............20.9 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................47 .....n...............22.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................44 .....n ...............31.0 Australia.................................2.0
2.21 Time to register property ......................................................51 .....n...............82.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................25 .....n.................2.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) ....................n/a .........................n/a Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP.............................................4 .....n ...............16.9 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................20 .....n .................1.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator.................................................n/a .........................n/a Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
196 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................53 .....n .................7.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................53 .....n .................7.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................46 .....n.................4.0 Panama..................................6.0
3.16 Manageability of public debt ..................................................4 .....n ...............13.1 Chile ......................................6.1
3.17 Credit default swap spreads.................................................n/a .........................n/a Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................48 .....n...............33.1 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................24 .....n .................1.3 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................52 .....n...............20.3 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................48 .....n...............39.8 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................49 .....n...............24.6 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................55 .....n...............20.8 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator.............................................15 .....n.................4.7 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................40 .....n.................3.6 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................55 .....n.................5.8 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................34 .....n.................6.6 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................49 .....n.................0.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................36 .....n.................0.3 China ...................................22.0
5.02 IPO proceeds amount ...........................................................27 .....n.................0.3 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................33 .....n.................0.3 China....................................12.6
 Nigeria

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................51 .....n.................0.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................56 .....n.................0.9 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................52 .....n.................0.0 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................53 .....n.................0.1 Ireland..................................15.6
5.08 Non–life insurance density ...................................................53 .....n.................0.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ..........................n/a .........................n/a China .....................................0.3
5.10 Life insurance coverage ........................................................44 .....n.................0.1 India.....................................55.4
5.11 Non–life insurance coverage .................................................26 .....n.................0.7 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................53 .....n.................0.4 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................49 .....n.................0.4 United States.......................10.8
5.14 Share of total number of securitization deals .......................44 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
197
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................44 .....n ...............19.4 Italy....................................348.2
6.10 Stock market capitalization to GDP ......................................n/a .........................n/a Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................48 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................52 .....n.................0.3 Ireland................................215.3
6.16 Public international bonds to GDP ........................................51 .....n.................0.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................47 .....n.................4.0 Switzerland ............................6.6
7.02 Venture capital availability......................................................55 .....n.................2.0 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................41 .....n.................2.6 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................28 .....n.................4.0 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................55 .....n.................2.0 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP...........................................5 .....n................11.7 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................34 .....n ........46,121.0 Japan............................717,241.6
7.08 Commercial bank branches ...................................................45 .....n.................6.4 Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................16 .....n.................3.0 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Norway
Key indicators Financial assets by major type, 2008
14.0%
Population (millions), 2009 .........................................................4.8 US$ bn
28.2%
GDP (US$ billions), 2009 .........................................................383.0
n Public debt securities .......253.0
GDP (current prices) per capita, 2009 ............................79,085.0 n Private debt securities......332.0
20.8%
GDP (PPP) as share (%) of world total, 2009 ........................0.37 n Banking deposits ...............187.2
Compound annual growth rate of real GDP (%), 2005–09 ..1.05 n Equity securities ................125.9

Total 898.0
37.0%
Total/GDP 199.2%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................15 4.3

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment ...........................................3 5.9

Financial sector liberalization ....................................................17 6.7
Corporate governance...................................................................2 5.8
Legal and regulatory issues .......................................................10 5.1
Contract enforcement....................................................................3 6.0
2nd pillar: Business environment ...............................................9 5.6
Human capital ...............................................................................10 5.3
198
Taxes...............................................................................................17 5.2
Infrastructure ................................................................................19 5.3
Cost of doing business ..................................................................2 6.7
3rd pillar: Financial stability........................................................8 5.4
Currency stability........................................................................n/a n/a
Banking system stability..............................................................24 4.8
Risk of sovereign debt crisis ........................................................8 6.1
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................16 4.3

Size index .......................................................................................30 2.7
Efficiency index...............................................................................6 6.1
Financial information disclosure..................................................3 4.0
5th pillar: Non-banking financial services .............................34 2.1
IPO activity.....................................................................................36 1.6
M&A activity..................................................................................19 3.0
Insurance .......................................................................................42 2.2
Securitization.................................................................................39 1.7
6th pillar: Financial markets......................................................26 2.6
Foreign exchange markets .........................................................19 1.7
Derivatives markets .....................................................................21 2.5
Equity market development ........................................................17 3.7
Bond market development..........................................................27 2.2
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................11 4.3

Commercial access......................................................................14 3.9
Retail access...................................................................................9 4.7
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Norway

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services .......19 .....n...............60.1 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................31 .....n.................4.3 Canada...................................5.2
1.05 Efficacy of corporate boards ...................................................5 .....n.................5.5 Sweden .................................5.9
1.06 Reliance on professional management ...................................2 .....n.................6.3 Sweden .................................6.5
1.07 Willingness to delegate...........................................................2 .....n.................5.9 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .........................6 .....n.................6.1 South Africa...........................6.4
1.09 Ethical behavior of firms..........................................................6 .....n.................6.4 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ........................3 .....n.................5.8 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................20 .....n.................3.4 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................30 .....n.................3.1 Switzerland ............................5.6
1.13 Regulation of securities exchanges.........................................4 .....n.................5.7 South Africa...........................6.0
1.14 Property rights.........................................................................8 .....n.................6.1 Switzerland ............................6.4
1.15 Intellectual property protection .............................................13 .....n.................5.6 Sweden .................................6.2
1.16 Diversion of public funds.........................................................7 .....n.................5.9 Sweden .................................6.5
1.17 Public trust of politicians .........................................................3 .....n.................5.6 Singapore ..............................6.4
1.18 Corruption perceptions index ..................................................9 .....n.................8.6 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................25 .....n.................8.0 Sweden ...............................15.0 199
Contract enforcement
1.21 Effectiveness of law-making bodies ........................................6 .....n.................5.2 Singapore ..............................6.5
1.22 Judicial independence ...........................................................11 .....n.................6.2 Sweden .................................6.6
1.23 Irregular payments in judicial decisions...................................5 .....n.................6.5 Sweden .................................6.8
1.24 Time to enforce a contract ......................................................3 .....n.............280.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................24 .....n...............33.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................15 .....n.................6.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................1 .....n.................9.9 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................16 .....n.................5.2 Switzerland ............................6.1
2.02 Quality of math and science education.................................35 .....n.................4.1 Singapore ..............................6.5
2.03 Extent of staff training.............................................................3 .....n.................5.5 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................14 .....n.................5.5 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................13 .....n.................4.7 Switzerland ............................5.7
2.06 Tertiary enrollment ..................................................................7 .....n ...............76.2 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ........................................5 .....n.................6.6 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition .......14 .....n.................4.8 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................32 .....n ...............12.1 China..................................–24.6
2.10 Time to pay taxes....................................................................8 .....n ...............87.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................26 .....n.................5.1 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .........................................1 .....n .................7.0 Norway...................................7.0
2.13 Internet users .........................................................................5 .....n...............82.6 Sweden ................................87.8
2.14 Broadband Internet subscribers ..............................................5 .....n...............33.3 Sweden................................41.2
2.15 Telephone lines......................................................................18 .....n...............39.8 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................53 .....n...............49.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business....................................................14 .....n .................1.9 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Norway
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................21 .....n.................2.5 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................1 .....n .................1.0 Multiple (4).............................1.0
2.20 Time to start a business ........................................................11 .....n .................7.0 Australia.................................2.0
2.21 Time to register property ........................................................4 .....n.................3.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................5 .....n.................0.9 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................12 .....n.................3.3 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP.............................................6 .....n ...............15.5 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................20 .....n .................1.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................31 .....n.................8.9 Jordan..................................16.8
200 3.12 Output loss during banking crises.........................................24 .....n.................6.4 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................33 .....n.................4.9 Panama..................................6.0
3.16 Manageability of public debt ................................................33 .....n...............49.2 Chile ......................................6.1
3.17 Credit default swap spreads ...................................................1 .....n...............25.9 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................27 .....n...............83.3 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................36 .....n...............50.6 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................35 .....n...............63.5 Hong Kong SAR ................329.5
4.05 Private credit to GDP .............................................................17 .....n .............102.0 United States.....................210.7
4.06 Bank deposits to GDP ..........................................................n/a .........................n/a Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................13 .....n .................1.9 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................35 .....n.................4.1 Netherlands ...........................6.5
4.09 Bank overhead costs ...............................................................6 .....n .................1.1 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................31 .....n .................7.9 Austria ...................................0.0
4.11 Bank operating costs to assets ...............................................7 .....n.................0.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ...............................1 .....n .................1.1 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage................................................1 .....n .............100.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................31 .....n.................0.5 China ...................................22.0
5.02 IPO proceeds amount ...........................................................30 .....n.................0.2 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................24 .....n.................0.5 China....................................12.6
 Norway

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................18 .....n .................1.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................12 .....n.................8.4 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................22 .....n.................0.8 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................24 .....n.................2.6 Ireland..................................15.6
5.08 Non–life insurance density ...................................................26 .....n.................2.1 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................37 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................45 .....n.................0.1 India.....................................55.4
5.11 Non–life insurance coverage .................................................50 .....n.................0.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................35 .....n.................0.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................37 .....n .................1.0 United States.......................10.8
5.14 Share of total number of securitization deals .......................34 .....n.................0.2 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................25 .....n.................0.3 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................17 .....n.................0.6 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover...........................................14 .....n .................1.2 United Kingdom ..................40.8

Derivatives markets
201
6.04 Interest rate derivatives turnover: Forward rate
agreements .............................................................................8 .....n .................1.6 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................25 .....n.................0.1 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................25 .....n.................0.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......26 .....n.................0.1 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................29 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................14 .....n .............139.0 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................26 .....n .............100.1 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................16 .....n .............146.8 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ..................n/a .........................n/a Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............14 .....n...............30.3 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............34 .....n ...............19.0 Japan .................................184.6
6.15 Private international bonds to GDP .......................................13 .....n ...............47.0 Ireland................................215.3
6.16 Public international bonds to GDP ........................................51 .....n.................0.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................30 .....n.................0.3 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication ...............................................8 .....n.................6.1 Switzerland ............................6.6
7.02 Venture capital availability........................................................2 .....n.................4.3 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................32 .....n.................2.8 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................12 .....n.................4.6 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ..........................................................5 .....n.................4.4 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................54 .....n.................0.0 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches .....................................................9 .....n...............34.5 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................21 .....n...............56.8 Canada...............................218.5
7.10 Total number of point of sale (POS) devices...........................5 .....n ..........3,014.5 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Pakistan
Key indicators Financial assets by major type, 2008
14.8%
Population (millions), 2009 .....................................................163.8 US$ bn
GDP (US$ billions), 2009 .........................................................166.5
n Public debt securities .........88.4
GDP (current prices) per capita, 2009 ..............................1,016.7 n Private debt securities..........0.6
GDP (PPP) as share (%) of world total, 2009 ........................0.63 55.5% n Banking deposits .................46.7
29.3% n Equity securities ..................23.5
Compound annual growth rate of real GDP (%), 2005–09 ..3.13
Total 159.1
0.4%
Total/GDP 96.7%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................54 2.6

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................54 2.9

Financial sector liberalization ....................................................55 1.6
Corporate governance.................................................................50 3.8
Legal and regulatory issues .......................................................50 3.0
Contract enforcement..................................................................50 3.3
2nd pillar: Business environment .............................................50 3.6
Human capital ...............................................................................56 3.2
202
Taxes...............................................................................................54 3.4
Infrastructure ................................................................................52 2.8
Cost of doing business ................................................................31 5.0
3rd pillar: Financial stability......................................................52 3.7
Currency stability..........................................................................27 4.0
Banking system stability..............................................................23 4.9
Risk of sovereign debt crisis ......................................................57 1.7
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................48 2.7

Size index .......................................................................................41 1.7
Efficiency index.............................................................................43 4.3
Financial information disclosure................................................48 1.3
5th pillar: Non-banking financial services .............................56 1.2
IPO activity.....................................................................................51 1.1
M&A activity..................................................................................53 1.1
Insurance .......................................................................................53 1.3
Securitization.................................................................................43 1.6
6th pillar: Financial markets......................................................36 1.9
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................40 1.9
Bond market development..........................................................36 1.9
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................55 2.3

Commercial access......................................................................39 3.3
Retail access.................................................................................47 1.3
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Pakistan

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................49 .....n ...............–1.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......49 .....n.................6.6 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................50 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................53 .....n.................3.5 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................54 .....n.................4.1 Sweden .................................5.9
1.06 Reliance on professional management .................................47 .....n.................4.0 Sweden .................................6.5
1.07 Willingness to delegate.........................................................46 .....n.................3.3 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................47 .....n.................4.2 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................49 .....n.................3.4 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................47 .....n.................3.9 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................24 .....n.................3.2 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................27 .....n.................3.2 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................40 .....n.................4.0 South Africa...........................6.0
1.14 Property rights.......................................................................50 .....n.................3.6 Switzerland ............................6.4
1.15 Intellectual property protection .............................................44 .....n.................3.1 Sweden .................................6.2
1.16 Diversion of public funds.......................................................43 .....n.................3.0 Sweden .................................6.5
1.17 Public trust of politicians .......................................................40 .....n.................2.3 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................52 .....n.................2.4 Denmark................................9.3
1.19 Strength of legal rights index ................................................30 .....n.................6.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................42 .....n.................3.5 Sweden ...............................15.0 203
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................45 .....n.................2.9 Singapore ..............................6.5
1.22 Judicial independence ...........................................................39 .....n.................3.6 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................46 .....n.................3.2 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................52 .....n .............976.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................54 .....n ...............47.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................18 .....n.................6.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................27 .....n...............23.8 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................44 .....n.................4.0 Switzerland ............................6.1
2.02 Quality of math and science education.................................41 .....n.................3.5 Singapore ..............................6.5
2.03 Extent of staff training...........................................................55 .....n.................3.3 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................54 .....n.................3.5 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................41 .....n.................3.7 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................57 .....n.................5.2 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................55 .....n.................2.8 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......38 .....n.................4.0 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................51 .....n.............560.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................49 .....n.................3.5 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................49 .....n.................5.5 Norway...................................7.0
2.13 Internet users .......................................................................52 .....n ...............10.5 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................55 .....n.................0.1 Sweden................................41.2
2.15 Telephone lines......................................................................55 .....n.................2.5 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................23 .....n .............115.2 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................26 .....n.................5.8 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Pakistan
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................48 .....n .................7.2 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................5 .....n.................4.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................32 .....n...............20.0 Australia.................................2.0
2.21 Time to register property ......................................................43 .....n...............50.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................33 .....n.................2.8 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................29 .....n.................0.7 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................12 .....n...............33.7 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................52 .....n ...............–6.3 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................34 .....n ...............37.8 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................15 .....n ...............31.5 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................48 .....n.................2.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index ...........................................................28 .....n.................6.2 Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................15 .....n................11.5 Jordan..................................16.8
204 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................55 .....n.................5.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................55 .....n.................5.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................55 .....n.................2.9 Panama..................................6.0
3.16 Manageability of public debt ................................................31 .....n...............48.0 Chile ......................................6.1
3.17 Credit default swap spreads .................................................50 .....n.............718.1 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................45 .....n...............39.9 Denmark ............................219.5
4.02 Central bank assets to GDP ....................................................9 .....n.................6.0 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................43 .....n...............36.0 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................46 .....n...............40.6 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................46 .....n ...............27.6 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................45 .....n...............35.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................50 .....n.................3.0 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................24 .....n.................2.1 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................42 .....n.................2.8 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................37 .....n ...............12.2 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................48 .....n .................1.5 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................16 .....n.................5.6 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................51 .....n.................0.0 China ...................................22.0
5.02 IPO proceeds amount ...........................................................53 .....n.................0.0 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................33 .....n.................0.3 China....................................12.6
 Pakistan

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................50 .....n.................0.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................52 .....n .................1.1 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................48 .....n.................0.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................47 .....n.................0.3 Ireland..................................15.6
5.08 Non–life insurance density ...................................................55 .....n.................0.4 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ..........................n/a .........................n/a China .....................................0.3
5.10 Life insurance coverage ........................................................28 .....n.................0.5 India.....................................55.4
5.11 Non–life insurance coverage .................................................27 .....n.................0.6 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................45 .....n.................0.6 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................43 .....n.................0.7 United States.......................10.8
5.14 Share of total number of securitization deals .......................31 .....n.................0.2 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
205
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................23 .....n...............78.4 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................42 .....n...............45.1 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................26 .....n...............46.3 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................36 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............39 .....n.................0.0 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............27 .....n ...............27.6 Japan .................................184.6
6.15 Private international bonds to GDP .......................................51 .....n.................0.4 Ireland................................215.3
6.16 Public international bonds to GDP ........................................40 .....n .................1.1 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................20 .....n .................1.4 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................49 .....n.................3.9 Switzerland ............................6.6
7.02 Venture capital availability......................................................33 .....n.................2.8 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................22 .....n.................3.4 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................30 .....n.................3.9 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................25 .....n.................3.3 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................36 .....n.................3.3 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................38 .....n........22,949.3 Japan............................717,241.6
7.08 Commercial bank branches ...................................................41 .....n.................8.7 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................46 .....n.................4.1 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................35 .....n...............49.0 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................17 .....n.................2.6 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Panama
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .........................................................3.5 17.8% US$ bn
28.1%
GDP (US$ billions), 2009 ...........................................................24.7
n Public debt securities .........10.3
GDP (current prices) per capita, 2009 ..............................7,132.7 n Private debt securities..........1.1
GDP (PPP) as share (%) of world total, 2009 ........................0.06 n Banking deposits .................18.8
3.1%
Compound annual growth rate of real GDP (%), 2005–09 ..6.65 n Equity securities ....................6.6

Total 36.8
51.0%
Total/GDP 158.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................39 3.2

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................32 4.3

Financial sector liberalization ....................................................19 6.2
Corporate governance.................................................................29 4.4
Legal and regulatory issues .......................................................38 3.4
Contract enforcement..................................................................55 3.1
2nd pillar: Business environment .............................................40 4.1
Human capital ...............................................................................42 3.7
206
Taxes...............................................................................................42 4.2
Infrastructure ................................................................................44 3.3
Cost of doing business ................................................................24 5.3
3rd pillar: Financial stability......................................................44 4.1
Currency stability..........................................................................30 3.9
Banking system stability..............................................................46 3.7
Risk of sovereign debt crisis ......................................................35 4.7
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................25 4.0

Size index .......................................................................................18 3.6
Efficiency index.............................................................................27 5.3
Financial information disclosure................................................31 2.4
5th pillar: Non-banking financial services .............................46 1.7
IPO activity...................................................................................n/a n/a
M&A activity..................................................................................51 1.1
Insurance .......................................................................................31 2.7
Securitization.................................................................................50 1.2
6th pillar: Financial markets......................................................56 1.1
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................54 1.1
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................32 3.3

Commercial access........................................................................5 4.5
Retail access.................................................................................39 2.0
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Panama

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................25 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......23 .....n...............53.0 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................23 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................35 .....n.................4.2 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................31 .....n.................4.6 Sweden .................................5.9
1.06 Reliance on professional management .................................44 .....n.................4.1 Sweden .................................6.5
1.07 Willingness to delegate.........................................................27 .....n.................4.0 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................30 .....n.................5.0 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................31 .....n.................4.2 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................27 .....n.................4.6 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................14 .....n.................3.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................51 .....n.................2.2 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................42 .....n.................4.0 South Africa...........................6.0
1.14 Property rights.......................................................................30 .....n.................4.7 Switzerland ............................6.4
1.15 Intellectual property protection .............................................29 .....n.................4.0 Sweden .................................6.2
1.16 Diversion of public funds.......................................................36 .....n.................3.2 Sweden .................................6.5
1.17 Public trust of politicians .......................................................43 .....n.................2.1 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................41 .....n.................3.4 Denmark................................9.3
1.19 Strength of legal rights index ................................................30 .....n.................6.0 Multiple (3)...........................10.0
1.20 Central bank transparency....................................................n/a .........................n/a Sweden ...............................15.0 207
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................51 .....n.................2.4 Singapore ..............................6.5
1.22 Judicial independence ...........................................................55 .....n.................2.5 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................47 .....n.................3.2 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................47 .....n.............686.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract........................19 .....n ...............31.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................44 .....n.................4.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................54 .....n...............50.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................55 .....n.................3.5 Switzerland ............................6.1
2.02 Quality of math and science education.................................55 .....n.................2.6 Singapore ..............................6.5
2.03 Extent of staff training...........................................................30 .....n.................4.2 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................41 .....n.................4.2 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................36 .....n.................3.9 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................32 .....n...............45.0 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................38 .....n.................4.5 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......35 .....n.................4.0 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................48 .....n.............482.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................34 .....n.................4.3 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................30 .....n.................6.4 Norway...................................7.0
2.13 Internet users .......................................................................40 .....n ...............27.5 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................36 .....n.................5.8 Sweden................................41.2
2.15 Telephone lines......................................................................45 .....n ...............15.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................47 .....n...............72.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................37 .....n ...............10.3 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Panama
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................20 .....n.................2.4 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................39 .....n...............18.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................19 .....n ...............12.0 Australia.................................2.0
2.21 Time to register property ......................................................29 .....n...............32.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................30 .....n.................2.5 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................28 .....n.................0.9 Venezuela ............................14.5
3.02 External vulnerability indicator.................................................9 .....n...............30.1 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................53 .....n ...............–6.3 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................27 .....n...............49.1 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................16 .....n .................1.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................41 .....n.................3.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles.............................3 .....n.................6.7 Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................39 .....n.................6.9 Jordan..................................16.8
208 3.12 Output loss during banking crises.........................................46 .....n...............85.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................41 .....n................11.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................36 .....n................11.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ......................................1 .....n.................6.0 Panama..................................6.0
3.16 Manageability of public debt ................................................26 .....n...............44.4 Chile ......................................6.1
3.17 Credit default swap spreads .................................................27 .....n .............130.1 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................25 .....n...............83.9 Denmark ............................219.5
4.02 Central bank assets to GDP ....................................................4 .....n ...............12.0 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................19 .....n...............82.9 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................20 .....n...............88.2 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................27 .....n...............80.6 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................20 .....n...............83.0 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator.............................................10 .....n.................5.1 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................47 .....n.................4.7 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................49 .....n.................3.7 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ...............................4 .....n .................1.4 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................23 .....n...............45.9 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share .................................................................n/a .........................n/a China ...................................22.0
5.02 IPO proceeds amount ..........................................................n/a .........................n/a Kazakhstan.............................1.1
5.03 Share of world IPOs .............................................................n/a .........................n/a China....................................12.6
 Panama

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................56 .....n.................0.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................50 .....n .................1.6 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................56 .....n.................0.0 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................35 .....n .................1.0 Ireland..................................15.6
5.08 Non–life insurance density ...................................................21 .....n.................2.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums .............................4 .....n.................0.2 China .....................................0.3
5.10 Life insurance coverage ........................................................51 .....n.................0.0 India.....................................55.4
5.11 Non–life insurance coverage .................................................55 .....n.................0.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................39 .....n.................0.8 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................48 .....n.................0.4 United States.......................10.8
5.14 Share of total number of securitization deals .......................55 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
209
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................49 .....n .................1.4 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................47 .....n...............28.9 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................43 .....n.................0.4 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................29 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................36 .....n.................4.6 Ireland................................215.3
6.16 Public international bonds to GDP ..........................................1 .....n...............34.1 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................16 .....n.................6.0 Switzerland ............................6.6
7.02 Venture capital availability......................................................20 .....n.................3.3 Hong Kong SAR ....................4.4
7.03 Ease of access to credit..........................................................6 .....n.................4.1 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................20 .....n.................4.2 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................11 .....n.................4.0 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP...........................................9 .....n.................9.7 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................35 .....n ........41,192.2 Japan............................717,241.6
7.08 Commercial bank branches ...................................................22 .....n...............18.5 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................33 .....n...............40.6 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................19 .....n .................1.6 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Peru
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................29.1 23.6% US$ bn
GDP (US$ billions), 2009 .........................................................126.8
n Public debt securities .........30.6
GDP (current prices) per capita, 2009 ..............................4,356.0 n Private debt securities..........9.2
42.9%
GDP (PPP) as share (%) of world total, 2009 ........................0.36 7.1% n Banking deposits .................34.3
Compound annual growth rate of real GDP (%), 2005–09 ..5.38 n Equity securities ..................55.6

Total 129.8
26.4%
Total/GDP 101.9%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................48 3.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................41 3.7

Financial sector liberalization ....................................................36 3.8
Corporate governance.................................................................38 4.2
Legal and regulatory issues .......................................................44 3.2
Contract enforcement..................................................................48 3.4
2nd pillar: Business environment .............................................47 3.8
Human capital ...............................................................................45 3.7
210
Taxes...............................................................................................46 4.0
Infrastructure ................................................................................48 3.0
Cost of doing business ................................................................42 4.6
3rd pillar: Financial stability......................................................20 4.8
Currency stability..........................................................................26 4.1
Banking system stability..............................................................18 5.1
Risk of sovereign debt crisis ......................................................27 5.1
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................47 2.7

Size index .......................................................................................52 1.1
Efficiency index.............................................................................46 4.2
Financial information disclosure................................................24 3.1
5th pillar: Non-banking financial services .............................48 1.6
IPO activity.....................................................................................45 1.2
M&A activity..................................................................................49 1.2
Insurance .......................................................................................46 2.1
Securitization.................................................................................33 2.0
6th pillar: Financial markets......................................................51 1.4
Foreign exchange markets .........................................................43 1.0
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................44 1.7
Bond market development..........................................................42 1.5
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................44 2.9

Commercial access......................................................................27 3.6
Retail access.................................................................................35 2.2
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Peru

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................32 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......46 .....n...............26.5 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................35 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................46 .....n.................4.0 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................27 .....n.................4.7 Sweden .................................5.9
1.06 Reliance on professional management .................................36 .....n.................4.5 Sweden .................................6.5
1.07 Willingness to delegate.........................................................40 .....n.................3.6 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................35 .....n.................4.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................41 .....n.................3.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................34 .....n.................4.4 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................45 .....n.................2.7 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................26 .....n.................3.3 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................54 .....n.................3.4 South Africa...........................6.0
1.14 Property rights.......................................................................48 .....n.................3.8 Switzerland ............................6.4
1.15 Intellectual property protection .............................................55 .....n.................2.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................42 .....n.................3.1 Sweden .................................6.5
1.17 Public trust of politicians .......................................................48 .....n .................1.9 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................37 .....n.................3.7 Denmark................................9.3
1.19 Strength of legal rights index ................................................19 .....n .................7.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................25 .....n.................8.0 Sweden ...............................15.0 211
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................56 .....n .................1.9 Singapore ..............................6.5
1.22 Judicial independence ...........................................................53 .....n.................2.6 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................55 .....n.................2.4 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................23 .....n.............428.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................48 .....n ...............41.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................15 .....n.................6.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................50 .....n...............35.7 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................26 .....n.................4.6 Switzerland ............................6.1
2.02 Quality of math and science education.................................56 .....n.................2.5 Singapore ..............................6.5
2.03 Extent of staff training...........................................................40 .....n.................3.8 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................46 .....n.................4.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................27 .....n.................4.1 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................38 .....n...............35.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................28 .....n.................5.3 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition .......19 .....n.................4.5 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................39 .....n ...............19.0 China..................................–24.6
2.10 Time to pay taxes..................................................................44 .....n.............380.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................46 .....n.................3.6 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................29 .....n.................6.4 Norway...................................7.0
2.13 Internet users .......................................................................43 .....n...............24.7 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................44 .....n.................2.5 Sweden................................41.2
2.15 Telephone lines......................................................................49 .....n ...............10.0 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................46 .....n...............75.4 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................51 .....n...............24.5 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Peru
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................30 .....n.................3.3 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................15 .....n .................7.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................50 .....n ...............41.0 Australia.................................2.0
2.21 Time to register property ......................................................12 .....n ...............14.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................39 .....n.................3.1 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................25 .....n .................1.2 Venezuela ............................14.5
3.02 External vulnerability indicator.................................................4 .....n...............22.4 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................32 .....n ...............–0.8 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................38 .....n...............50.8 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................14 .....n...............28.1 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................14 .....n.................0.8 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................32 .....n.................4.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles.............................2 .....n.................6.7 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................24 .....n.................5.4 Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
212 3.12 Output loss during banking crises.........................................33 .....n ...............41.4 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................35 .....n ...............13.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................36 .....n................11.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ......................................7 .....n.................5.8 Panama..................................6.0
3.16 Manageability of public debt ................................................13 .....n...............25.0 Chile ......................................6.1
3.17 Credit default swap spreads .................................................29 .....n .............133.6 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................52 .....n...............20.5 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................49 .....n...............24.3 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................53 .....n...............34.4 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................52 .....n ...............19.8 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................52 .....n...............24.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................51 .....n.................2.7 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................45 .....n.................4.4 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................28 .....n.................6.6 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................52 .....n.................4.2 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................14 .....n.................2.7 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................31 .....n ...............31.8 Argentina ...........................100.0
4.14 Public credit registry coverage ................................................9 .....n...............23.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................46 .....n.................0.1 China ...................................22.0
5.02 IPO proceeds amount ...........................................................36 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................48 .....n.................0.1 China....................................12.6
 Peru

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................48 .....n.................0.1 United States ......................36.0
5.05 M&A transaction value to GDP .............................................48 .....n .................1.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................43 .....n.................0.2 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................43 .....n.................0.5 Ireland..................................15.6
5.08 Non–life insurance density ...................................................48 .....n.................0.8 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................10 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................42 .....n.................0.2 India.....................................55.4
5.11 Non–life insurance coverage .................................................40 .....n.................0.2 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................36 .....n.................0.9 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................38 .....n .................1.0 United States.......................10.8
5.14 Share of total number of securitization deals........................19 .....n.................0.5 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................43 .....n.................0.0 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................36 .....n.................0.1 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
213
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................46 .....n.................6.5 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................23 .....n .............109.8 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................38 .....n ...............10.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................27 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............32 .....n.................4.1 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............38 .....n ...............12.4 Japan .................................184.6
6.15 Private international bonds to GDP .......................................43 .....n.................2.6 Ireland................................215.3
6.16 Public international bonds to GDP.........................................17 .....n .................7.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................35 .....n.................0.2 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................32 .....n.................4.8 Switzerland ............................6.6
7.02 Venture capital availability......................................................29 .....n.................2.9 Hong Kong SAR ....................4.4
7.03 Ease of access to credit..........................................................7 .....n.................4.0 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................42 .....n.................3.7 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................23 .....n.................3.3 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................30 .....n.................3.8 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................26 .....n........78,336.7 Japan............................717,241.6
7.08 Commercial bank branches ...................................................44 .....n .................7.3 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................41 .....n...............22.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................34 .....n...............54.0 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .......................................................................6 .....n................17.6 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Philippines
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................92.2 22.8% US$ bn
GDP (US$ billions), 2009 .........................................................161.0
n Public debt securities .........95.4
GDP (current prices) per capita, 2009 ..............................1,745.6 41.7% n Private debt securities........12.9
GDP (PPP) as share (%) of world total, 2009 ........................0.47 n Banking deposits .................68.5
Compound annual growth rate of real GDP (%), 2005–09 ..3.40 n Equity securities ..................52.1

29.9% Total 228.9

5.7%
Total/GDP 136.7%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................50 3.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................42 3.6

Financial sector liberalization ....................................................31 4.4
Corporate governance.................................................................40 4.2
Legal and regulatory issues .......................................................53 2.8
Contract enforcement..................................................................54 3.1
2nd pillar: Business environment .............................................53 3.3
Human capital ...............................................................................48 3.6
214
Taxes...............................................................................................40 4.3
Infrastructure ................................................................................53 2.8
Cost of doing business ................................................................56 2.7
3rd pillar: Financial stability......................................................37 4.4
Currency stability..........................................................................16 4.8
Banking system stability..............................................................34 4.3
Risk of sovereign debt crisis ......................................................43 4.1
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................46 2.7

Size index .......................................................................................39 2.0
Efficiency index.............................................................................45 4.3
Financial information disclosure................................................51 1.2
5th pillar: Non-banking financial services .............................32 2.2
IPO activity.....................................................................................32 1.8
M&A activity..................................................................................25 2.4
Insurance .......................................................................................51 1.6
Securitization.................................................................................20 2.9
6th pillar: Financial markets......................................................37 1.9
Foreign exchange markets .........................................................41 1.0
Derivatives markets .....................................................................36 1.0
Equity market development ........................................................38 1.9
Bond market development..........................................................20 3.0
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................50 2.6

Commercial access......................................................................46 3.2
Retail access.................................................................................38 2.1
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Philippines

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................43 .....n.................0.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......26 .....n ...............61.5 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................29 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................38 .....n.................4.1 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................28 .....n.................4.7 Sweden .................................5.9
1.06 Reliance on professional management .................................28 .....n.................4.7 Sweden .................................6.5
1.07 Willingness to delegate.........................................................28 .....n.................4.0 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................41 .....n.................4.6 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................56 .....n.................3.0 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................42 .....n.................4.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................52 .....n.................2.5 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................39 .....n.................2.8 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................38 .....n.................4.1 South Africa...........................6.0
1.14 Property rights.......................................................................49 .....n.................3.7 Switzerland ............................6.4
1.15 Intellectual property protection .............................................49 .....n.................2.8 Sweden .................................6.2
1.16 Diversion of public funds.......................................................56 .....n.................2.0 Sweden .................................6.5
1.17 Public trust of politicians .......................................................55 .....n .................1.6 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................52 .....n.................2.4 Denmark................................9.3
1.19 Strength of legal rights index ................................................50 .....n.................3.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................18 .....n.................9.5 Sweden ...............................15.0 215
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................49 .....n.................2.5 Singapore ..............................6.5
1.22 Judicial independence ...........................................................51 .....n.................2.8 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................54 .....n.................2.6 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................50 .....n.............842.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................37 .....n ...............37.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................52 .....n.................4.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................33 .....n...............26.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................38 .....n.................4.3 Switzerland ............................6.1
2.02 Quality of math and science education.................................47 .....n.................3.1 Singapore ..............................6.5
2.03 Extent of staff training...........................................................29 .....n.................4.3 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................49 .....n.................4.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................52 .....n.................3.3 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................45 .....n...............28.5 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................56 .....n.................2.6 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......33 .....n.................4.1 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................22 .....n .............195.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................52 .....n.................3.2 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................47 .....n.................5.6 Norway...................................7.0
2.13 Internet users .......................................................................55 .....n.................6.2 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................50 .....n .................1.2 Sweden................................41.2
2.15 Telephone lines......................................................................53 .....n.................4.5 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................22 .....n .............115.3 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................53 .....n...............28.2 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Philippines
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................33 .....n.................4.3 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................55 .....n...............38.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................54 .....n...............52.0 Australia.................................2.0
2.21 Time to register property ......................................................31 .....n...............33.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................55 .....n.................5.7 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .......................7 .....n.................5.4 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................10 .....n...............30.3 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................18 .....n.................4.1 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................35 .....n...............39.9 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................22 .....n...............39.4 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................46 .....n.................2.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................41 .....n.................3.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................34 .....n.................4.5 Ireland....................................6.8
3.10 Financial Stress Index .............................................................4 .....n.................0.4 Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................19 .....n................11.3 Jordan..................................16.8
216 3.12 Output loss during banking crises.........................................42 .....n...............68.8 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................47 .....n ...............10.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................50 .....n.................8.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ......................................5 .....n.................5.8 Panama..................................6.0
3.16 Manageability of public debt ................................................40 .....n ...............57.3 Chile ......................................6.1
3.17 Credit default swap spreads .................................................34 .....n .............170.9 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................49 .....n...............32.4 Denmark ............................219.5
4.02 Central bank assets to GDP ....................................................5 .....n.................6.9 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................34 .....n ...............51.0 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................44 .....n...............48.6 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................47 .....n ...............27.1 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................41 .....n...............45.8 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................49 .....n.................3.0 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................29 .....n.................2.5 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................38 .....n ...............16.1 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................45 .....n.................3.3 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................45 .....n.................6.1 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................35 .....n.................0.3 China ...................................22.0
5.02 IPO proceeds amount ...........................................................22 .....n.................0.3 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................26 .....n.................0.5 China....................................12.6
 Philippines

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................31 .....n.................0.3 United States ......................36.0
5.05 M&A transaction value to GDP .............................................18 .....n .................7.2 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................34 .....n.................0.3 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................34 .....n .................1.0 Ireland..................................15.6
5.08 Non–life insurance density ...................................................51 .....n.................0.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................41 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage.........................................................18 .....n.................0.9 India.....................................55.4
5.11 Non–life insurance coverage .................................................30 .....n.................0.5 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................40 .....n.................0.8 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................15 .....n.................2.3 United States.......................10.8
5.14 Share of total number of securitization deals .......................20 .....n.................0.4 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................39 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................37 .....n.................0.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................36 .....n.................0.0 United Kingdom ..................40.8

Derivatives markets
217
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................31 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................36 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......33 .....n.................0.0 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................40 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................31 .....n...............50.9 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................31 .....n ...............76.3 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................39 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............36 .....n .................1.0 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............21 .....n...............33.4 Japan .................................184.6
6.15 Private international bonds to GDP .......................................29 .....n.................6.6 Ireland................................215.3
6.16 Public international bonds to GDP ..........................................7 .....n ...............15.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................11 .....n .................1.9 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................39 .....n.................4.5 Switzerland ............................6.6
7.02 Venture capital availability......................................................43 .....n.................2.5 Hong Kong SAR ....................4.4
7.03 Ease of access to credit..........................................................9 .....n.................3.9 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................37 .....n.................3.8 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................36 .....n.................2.9 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................47 .....n.................0.9 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................33 .....n ........49,910.4 Japan............................717,241.6
7.08 Commercial bank branches ...................................................35 .....n................11.8 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................44 .....n ...............14.2 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .......................................................................9 .....n................11.0 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Poland
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................38.1 17.2%
US$ bn
GDP (US$ billions), 2009 .........................................................430.2
n Public debt securities .......234.8
GDP (current prices) per capita, 2009 ............................11,287.9 n Private debt securities..........3.8
44.6%
GDP (PPP) as share (%) of world total, 2009 ........................0.98 n Banking deposits ...............197.2
Compound annual growth rate of real GDP (%), 2005–09 ..3.91 n Equity securities ..................90.2
37.5% Total 526.1
0.7%
Total/GDP 99.6%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................35 3.3

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................36 4.0

Financial sector liberalization ....................................................46 3.1
Corporate governance.................................................................27 4.4
Legal and regulatory issues .......................................................23 4.2
Contract enforcement..................................................................29 4.4
2nd pillar: Business environment .............................................35 4.4
Human capital ...............................................................................21 4.6
218
Taxes...............................................................................................30 4.7
Infrastructure ................................................................................29 4.4
Cost of doing business ................................................................50 3.9
3rd pillar: Financial stability......................................................29 4.5
Currency stability..........................................................................44 3.3
Banking system stability..............................................................20 5.0
Risk of sovereign debt crisis ......................................................26 5.3
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................39 3.1

Size index .......................................................................................42 1.7
Efficiency index.............................................................................39 4.6
Financial information disclosure................................................26 3.0
5th pillar: Non-banking financial services .............................27 2.4
IPO activity.......................................................................................7 3.7
M&A activity..................................................................................36 1.6
Insurance .......................................................................................21 3.0
Securitization.................................................................................51 1.1
6th pillar: Financial markets......................................................41 1.8
Foreign exchange markets .........................................................26 1.2
Derivatives markets .....................................................................25 1.8
Equity market development ........................................................43 1.7
Bond market development..........................................................28 2.2
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................38 3.0

Commercial access......................................................................42 3.2
Retail access.................................................................................26 2.9
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Poland

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................41 .....n.................0.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......39 .....n...............32.2 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................42 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................33 .....n.................4.2 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................35 .....n.................4.5 Sweden .................................5.9
1.06 Reliance on professional management .................................32 .....n.................4.6 Sweden .................................6.5
1.07 Willingness to delegate.........................................................29 .....n.................4.0 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................28 .....n.................5.1 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................29 .....n.................4.2 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................33 .....n.................4.5 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................41 .....n.................2.7 Singapore ..............................5.5
1.12 Centralization of economic policymaking ................................8 .....n.................4.4 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................20 .....n.................5.0 South Africa...........................6.0
1.14 Property rights.......................................................................33 .....n.................4.6 Switzerland ............................6.4
1.15 Intellectual property protection .............................................36 .....n.................3.7 Sweden .................................6.2
1.16 Diversion of public funds.......................................................25 .....n.................4.2 Sweden .................................6.5
1.17 Public trust of politicians .......................................................36 .....n.................2.5 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................26 .....n.................5.0 Denmark................................9.3
1.19 Strength of legal rights index ..................................................4 .....n.................9.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................15 .....n ...............10.0 Sweden ...............................15.0 219
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................39 .....n.................3.3 Singapore ..............................6.5
1.22 Judicial independence ...........................................................29 .....n.................4.3 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................29 .....n.................4.9 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................49 .....n.............830.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................39 .....n...............38.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................21 .....n.................6.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................5 .....n ...............12.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................39 .....n.................4.2 Switzerland ............................6.1
2.02 Quality of math and science education.................................23 .....n.................4.6 Singapore ..............................6.5
2.03 Extent of staff training...........................................................31 .....n.................4.2 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................19 .....n.................5.1 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................47 .....n.................3.4 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................15 .....n...............66.9 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................26 .....n.................5.5 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......31 .....n.................4.1 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................20 .....n ...............–2.9 China..................................–24.6
2.10 Time to pay taxes..................................................................45 .....n.............395.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................51 .....n.................3.4 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................42 .....n.................6.0 Norway...................................7.0
2.13 Internet users .......................................................................28 .....n...............49.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................26 .....n ...............12.6 Sweden................................41.2
2.15 Telephone lines......................................................................29 .....n...............25.5 Switzerland ..........................64.1
2.16 Mobile telephone subscribers.................................................6 .....n .............141.1 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................48 .....n................17.9 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Poland
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ....................................................6 .....n.................0.5 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................46 .....n...............20.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................45 .....n...............32.0 Australia.................................2.0
2.21 Time to register property ......................................................56 .....n..............197.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................36 .....n.................3.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................23 .....n .................1.7 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................30 .....n .............130.5 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................43 .....n ...............–3.8 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................28 .....n...............58.7 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................20 .....n .................1.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................32 .....n.................4.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ...........................19 .....n.................5.3 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................23 .....n.................5.2 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................20 .....n................11.1 Jordan..................................16.8
220 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................31 .....n ...............15.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................30 .....n ...............14.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................10 .....n.................5.7 Panama..................................6.0
3.16 Manageability of public debt ................................................30 .....n...............46.5 Chile ......................................6.1
3.17 Credit default swap spreads .................................................33 .....n .............149.7 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................41 .....n...............50.6 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................41 .....n...............40.4 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................42 .....n...............53.3 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................40 .....n...............40.6 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................43 .....n...............40.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................26 .....n.................4.5 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................31 .....n.................2.5 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................45 .....n...............28.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................43 .....n.................2.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................35 .....n .................7.0 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage ..............................................19 .....n...............68.3 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................13 .....n .................1.2 China ...................................22.0
5.02 IPO proceeds amount ...........................................................16 .....n.................0.4 Kazakhstan.............................1.1
5.03 Share of world IPOs ................................................................5 .....n.................6.0 China....................................12.6
 Poland

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................32 .....n.................0.3 United States ......................36.0
5.05 M&A transaction value to GDP .............................................41 .....n.................2.4 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................21 .....n.................0.9 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................29 .....n .................1.9 Ireland..................................15.6
5.08 Non–life insurance density ...................................................32 .....n .................1.9 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums .............................2 .....n.................0.3 China .....................................0.3
5.10 Life insurance coverage ........................................................20 .....n.................0.7 India.....................................55.4
5.11 Non–life insurance coverage .................................................25 .....n.................0.7 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................29 .....n .................1.1 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................51 .....n.................0.2 United States.......................10.8
5.14 Share of total number of securitization deals .......................41 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................29 .....n.................0.2 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................29 .....n.................0.1 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................25 .....n.................0.3 United Kingdom ..................40.8

Derivatives markets
221
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................16 .....n.................0.4 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................24 .....n.................0.1 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................27 .....n.................0.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......25 .....n.................0.2 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................22 .....n.................0.1 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................35 .....n...............45.4 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................40 .....n ...............51.1 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................34 .....n...............25.4 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................22 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............39 .....n.................0.0 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP..............17 .....n...............38.9 Japan .................................184.6
6.15 Private international bonds to GDP .......................................49 .....n.................0.7 Ireland................................215.3
6.16 Public international bonds to GDP ..........................................9 .....n................11.4 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................40 .....n.................0.0 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................43 .....n.................4.4 Switzerland ............................6.6
7.02 Venture capital availability......................................................36 .....n.................2.7 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................31 .....n.................2.9 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................43 .....n.................3.7 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................37 .....n.................2.9 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................28 .....n.................3.8 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................16 .....n ......162,641.1 Japan............................717,241.6
7.08 Commercial bank branches ...................................................10 .....n...............32.2 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................30 .....n...............49.1 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................22 .....n.............666.7 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................25 .....n.................0.2 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Romania
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................21.4 17.48% US$ bn
GDP (US$ billions), 2009 .........................................................161.5
35.8% n Public debt securities .........41.1
GDP (current prices) per capita, 2009 ..............................7,542.5 n Private debt securities.........n/a
GDP (PPP) as share (%) of world total, 2009 ........................0.36 n Banking deposits .................53.7
Compound annual growth rate of real GDP (%), 2005–09 ..2.72 n Equity securities ..................19.9

Total 114.8
46.8%

Total/GDP 56.2%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................44 3.1

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................26 4.5

Financial sector liberalization ....................................................20 6.2
Corporate governance.................................................................45 4.1
Legal and regulatory issues .......................................................39 3.4
Contract enforcement..................................................................33 4.3
2nd pillar: Business environment .............................................26 4.7
Human capital ...............................................................................35 4.1
222
Taxes...............................................................................................14 5.4
Infrastructure ................................................................................33 3.9
Cost of doing business ................................................................21 5.6
3rd pillar: Financial stability......................................................50 3.8
Currency stability..........................................................................35 3.6
Banking system stability..............................................................38 4.1
Risk of sovereign debt crisis ......................................................48 3.5
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................56 2.1

Size index .......................................................................................48 1.3
Efficiency index.............................................................................57 2.9
Financial information disclosure................................................34 2.2
5th pillar: Non-banking financial services .............................53 1.4
IPO activity.....................................................................................52 1.0
M&A activity..................................................................................46 1.3
Insurance .......................................................................................41 2.2
Securitization.................................................................................48 1.2
6th pillar: Financial markets......................................................40 1.8
Foreign exchange markets .........................................................42 1.0
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................28 2.4
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................40 3.0

Commercial access......................................................................41 3.2
Retail access.................................................................................27 2.8
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Romania

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................26 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......25 .....n...............52.7 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................24 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................48 .....n.................3.9 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................44 .....n.................4.4 Sweden .................................5.9
1.06 Reliance on professional management .................................38 .....n.................4.4 Sweden .................................6.5
1.07 Willingness to delegate.........................................................45 .....n.................3.4 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................42 .....n.................4.6 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................45 .....n.................3.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................41 .....n.................4.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................36 .....n.................2.9 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................31 .....n.................3.0 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................49 .....n.................3.7 South Africa...........................6.0
1.14 Property rights.......................................................................41 .....n.................4.2 Switzerland ............................6.4
1.15 Intellectual property protection .............................................41 .....n.................3.2 Sweden .................................6.2
1.16 Diversion of public funds.......................................................41 .....n.................3.1 Sweden .................................6.5
1.17 Public trust of politicians .......................................................47 .....n.................2.0 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................36 .....n.................3.8 Denmark................................9.3
1.19 Strength of legal rights index ................................................12 .....n.................8.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................35 .....n.................6.5 Sweden ...............................15.0 223
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................47 .....n.................2.8 Singapore ..............................6.5
1.22 Judicial independence ...........................................................45 .....n.................3.5 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................36 .....n.................4.0 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................30 .....n .............512.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract........................19 .....n ...............31.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................21 .....n.................6.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................41 .....n...............28.9 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................49 .....n.................3.7 Switzerland ............................6.1
2.02 Quality of math and science education.................................25 .....n.................4.6 Singapore ..............................6.5
2.03 Extent of staff training...........................................................37 .....n.................3.9 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................53 .....n.................3.5 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................43 .....n.................3.6 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................23 .....n...............58.3 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................31 .....n.................5.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......52 .....n.................3.5 Singapore ..............................5.8
2.09 Marginal tax variation ..............................................................3 .....n .............–18.2 China..................................–24.6
2.10 Time to pay taxes..................................................................25 .....n.............202.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................57 .....n.................2.4 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................45 .....n.................5.7 Norway...................................7.0
2.13 Internet users .......................................................................38 .....n...............29.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................28 .....n................11.7 Sweden................................41.2
2.15 Telephone lines......................................................................33 .....n...............23.6 Switzerland ..........................64.1
2.16 Mobile telephone subscribers.................................................5 .....n .............142.9 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................18 .....n.................2.9 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Romania
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................14 .....n .................1.3 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................28 .....n................11.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................15 .....n ...............10.0 Australia.................................2.0
2.21 Time to register property ......................................................42 .....n...............48.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................40 .....n.................3.3 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .......................5 .....n.................6.9 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................20 .....n...............68.1 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................56 .....n .............–10.0 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................37 .....n...............49.1 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................31 .....n...............68.1 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................16 .....n .................1.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................41 .....n.................3.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................30 .....n.................4.7 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................32 .....n.................9.5 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................32 .....n.................8.3 Jordan..................................16.8
224 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................41 .....n................11.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................44 .....n ...............10.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................50 .....n.................3.6 Panama..................................6.0
3.16 Manageability of public debt ................................................12 .....n...............24.0 Chile ......................................6.1
3.17 Credit default swap spreads .................................................48 .....n.............378.8 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................46 .....n...............38.6 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................48 .....n...............29.4 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................49 .....n...............38.3 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................43 .....n...............36.9 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................50 .....n...............29.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................53 .....n.................2.4 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................52 .....n.................6.8 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................30 .....n .................7.8 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................46 .....n.................3.3 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................39 .....n ...............14.8 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................33 .....n...............30.2 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................15 .....n.................5.7 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................50 .....n.................0.1 China ...................................22.0
5.02 IPO proceeds amount ...........................................................51 .....n.................0.0 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................38 .....n.................0.3 China....................................12.6
 Romania

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................45 .....n.................0.1 United States ......................36.0
5.05 M&A transaction value to GDP .............................................46 .....n.................2.1 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................38 .....n.................0.3 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................46 .....n.................0.3 Ireland..................................15.6
5.08 Non–life insurance density ...................................................41 .....n .................1.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums .............................6 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................48 .....n.................0.1 India.....................................55.4
5.11 Non–life insurance coverage .................................................36 .....n.................0.3 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................55 .....n.................0.2 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................47 .....n.................0.4 United States.......................10.8
5.14 Share of total number of securitization deals .......................44 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................40 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................40 .....n.................0.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................33 .....n.................0.1 United Kingdom ..................40.8

Derivatives markets
225
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................36 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................38 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................42 .....n...............24.6 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................48 .....n...............25.1 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................39 .....n .................7.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people.....................6 .....n.................0.8 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................54 .....n.................0.0 Ireland................................215.3
6.16 Public international bonds to GDP ........................................29 .....n.................2.7 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................48 .....n.................3.9 Switzerland ............................6.6
7.02 Venture capital availability......................................................44 .....n.................2.4 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................43 .....n.................2.6 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................48 .....n.................3.1 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................44 .....n.................2.6 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP .........................................14 .....n.................8.2 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches .....................................................8 .....n...............35.0 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................25 .....n...............53.2 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................24 .....n.............540.3 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................20 .....n .................1.0 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Russian Federation
Key indicators Financial assets by major type, 2008
5.5%
5.5%
Population (millions), 2009 .....................................................141.4 US$ bn
GDP (US$ billions), 2009 ......................................................1,229.2
n Public debt securities .......107.9
GDP (current prices) per capita, 2009 ..............................8,693.8 22.3% n Private debt securities......109.2
GDP (PPP) as share (%) of world total, 2009 ........................3.05 n Banking deposits ...............440.6
Compound annual growth rate of real GDP (%), 2005–09 ..2.51 n Equity securities .............1,321.8
66.8%
Total 1,979.6

Total/GDP 119.2%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................40 3.2

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................53 3.1

Financial sector liberalization ....................................................51 2.2
Corporate governance.................................................................54 3.6
Legal and regulatory issues .......................................................55 2.6
Contract enforcement..................................................................34 4.2
2nd pillar: Business environment .............................................34 4.4
Human capital ...............................................................................29 4.3
226
Taxes...............................................................................................41 4.2
Infrastructure ................................................................................32 4.0
Cost of doing business ................................................................25 5.3
3rd pillar: Financial stability......................................................42 4.2
Currency stability..........................................................................12 5.0
Banking system stability..............................................................51 3.5
Risk of sovereign debt crisis ......................................................41 4.3
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................57 2.1

Size index .......................................................................................47 1.4
Efficiency index.............................................................................55 3.1
Financial information disclosure................................................45 1.4
5th pillar: Non-banking financial services ...............................5 4.3
IPO activity.....................................................................................13 3.3
M&A activity....................................................................................9 4.7
Insurance .......................................................................................13 3.5
Securitization...................................................................................4 5.7
6th pillar: Financial markets......................................................33 2.1
Foreign exchange markets .........................................................14 1.9
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................30 2.3
Bond market development..........................................................38 1.9
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................54 2.4

Commercial access......................................................................50 2.9
Retail access.................................................................................41 1.9
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Russian Federation

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................46 .....n................-0.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services ......n/a .........................n/a Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................53 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................47 .....n.................4.0 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................52 .....n.................4.1 Sweden .................................5.9
1.06 Reliance on professional management .................................51 .....n.................3.9 Sweden .................................6.5
1.07 Willingness to delegate.........................................................52 .....n.................3.1 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................52 .....n.................3.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................51 .....n.................3.3 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................56 .....n.................3.2 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................53 .....n.................2.5 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................38 .....n.................2.8 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................55 .....n.................3.3 South Africa...........................6.0
1.14 Property rights.......................................................................54 .....n.................2.9 Switzerland ............................6.4
1.15 Intellectual property protection .............................................53 .....n.................2.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................50 .....n.................2.6 Sweden .................................6.5
1.17 Public trust of politicians .......................................................33 .....n.................2.9 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................55 .....n.................2.2 Denmark................................9.3
1.19 Strength of legal rights index ................................................50 .....n.................3.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................44 .....n.................3.0 Sweden ...............................15.0 227
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................38 .....n.................3.3 Singapore ..............................6.5
1.22 Judicial independence ...........................................................52 .....n.................2.7 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................50 .....n.................3.1 Sweden .................................6.8
1.24 Time to enforce a contract ......................................................5 .....n .............281.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................37 .....n ...............37.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................39 .....n.................5.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................8 .....n ...............13.4 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................47 .....n.................3.8 Switzerland ............................6.1
2.02 Quality of math and science education.................................32 .....n.................4.4 Singapore ..............................6.5
2.03 Extent of staff training...........................................................47 .....n.................3.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................44 .....n.................4.1 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................53 .....n.................3.2 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................10 .....n ...............74.7 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................47 .....n.................3.9 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......51 .....n.................3.5 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................39 .....n.............320.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................47 .....n.................3.6 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................55 .....n.................5.0 Norway...................................7.0
2.13 Internet users .......................................................................36 .....n...............32.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................34 .....n.................6.6 Sweden................................41.2
2.15 Telephone lines......................................................................24 .....n ...............31.8 Switzerland ..........................64.1
2.16 Mobile telephone subscribers.................................................7 .....n .............138.2 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business....................................................17 .....n.................2.7 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Russian Federation
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ....................................................2 .....n.................0.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................20 .....n.................9.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................42 .....n...............30.0 Australia.................................2.0
2.21 Time to register property ......................................................37 .....n...............43.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................42 .....n.................3.8 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .......................6 .....n.................5.6 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................13 .....n...............33.9 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................15 .....n.................5.3 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................32 .....n...............33.5 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................21 .....n...............38.3 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................55 .....n.................3.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................48 .....n.................2.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................44 .....n .................1.0 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................29 .....n.................6.8 Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................11 .....n ...............12.0 Jordan..................................16.8
228 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................35 .....n ...............13.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................34 .....n ...............12.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................53 .....n.................3.3 Panama..................................6.0
3.16 Manageability of public debt ..................................................2 .....n.................8.3 Chile ......................................6.1
3.17 Credit default swap spreads .................................................40 .....n.............189.3 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................44 .....n ...............41.3 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................29 .....n.................0.8 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................46 .....n ...............31.7 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................47 .....n...............40.2 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................41 .....n...............39.0 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................48 .....n...............30.9 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................43 .....n.................3.5 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................53 .....n .................7.6 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................48 .....n ...............37.9 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................39 .....n.................2.7 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................38 .....n ...............14.3 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ....................................................................5 .....n.................4.0 China ...................................22.0
5.02 IPO proceeds amount ...........................................................14 .....n.................0.5 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................23 .....n.................0.7 China....................................12.6
 Russian Federation

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................10 .....n.................3.1 United States ......................36.0
5.05 M&A transaction value to GDP .............................................16 .....n .................7.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ......................................8 .....n.................3.6 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................57 .....n.................0.1 Ireland..................................15.6
5.08 Non–life insurance density ...................................................14 .....n.................3.2 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................15 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................47 .....n.................0.1 India.....................................55.4
5.11 Non–life insurance coverage ...................................................4 .....n.................4.5 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................21 .....n .................1.5 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................14 .....n.................2.6 United States.......................10.8
5.14 Share of total number of securitization deals .........................3 .....n.................3.6 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ..............................................8 .....n.................2.7 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................22 .....n.................0.3 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover...........................................16 .....n.................0.7 United Kingdom ..................40.8

Derivatives markets
229
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................37 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................30 .....n ...............51.8 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................18 .....n .............124.6 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................24 .....n...............66.4 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................42 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............39 .....n.................0.0 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............41 .....n.................4.0 Japan .................................184.6
6.15 Private international bonds to GDP .......................................26 .....n ...............10.0 Ireland................................215.3
6.16 Public international bonds to GDP ........................................32 .....n.................2.5 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................12 .....n .................1.9 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................52 .....n.................3.6 Switzerland ............................6.6
7.02 Venture capital availability......................................................47 .....n.................2.3 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................40 .....n.................2.6 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................52 .....n.................2.7 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................49 .....n.................2.3 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP .........................................16 .....n.................5.7 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................50 .....n.................2.6 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................16 .....n ...............76.5 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................27 .....n.............293.0 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................24 .....n.................0.5 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Saudi Arabia
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................25.5 16.4%
US$ bn
GDP (US$ billions), 2009 .........................................................369.7 2.3% n Public debt securities .........89.6
GDP (current prices) per capita, 2009 ............................14,486.1 n Private debt securities........12.6
45.1%
GDP (PPP) as share (%) of world total, 2009 ........................0.86 n Banking deposits ...............197.5
Compound annual growth rate of real GDP (%), 2005–09 ..1.92 n Equity securities ................246.3
36.2% Total 546.1

Total/GDP 114.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................26 3.9

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................29 4.4

Financial sector liberalization ....................................................38 3.7
Corporate governance.................................................................19 5.0
Legal and regulatory issues .......................................................26 4.1
Contract enforcement..................................................................25 4.6
2nd pillar: Business environment .............................................22 5.0
Human capital ...............................................................................33 4.2
230
Taxes.................................................................................................5 6.0
Infrastructure ................................................................................34 3.8
Cost of doing business ..................................................................9 6.1
3rd pillar: Financial stability........................................................1 6.1
Currency stability............................................................................5 5.6
Banking system stability................................................................1 6.4
Risk of sovereign debt crisis ........................................................6 6.2
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................34 3.5

Size index .......................................................................................37 2.1
Efficiency index.............................................................................10 6.0
Financial information disclosure................................................43 1.5
5th pillar: Non-banking financial services .............................54 1.4
IPO activity.....................................................................................46 1.2
M&A activity..................................................................................52 1.1
Insurance .......................................................................................40 2.2
Securitization.................................................................................52 1.1
6th pillar: Financial markets......................................................35 1.9
Foreign exchange markets .........................................................36 1.1
Derivatives markets .....................................................................27 1.7
Equity market development ........................................................22 3.1
Bond market development..........................................................43 1.5
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access..........................................................4 4.7

Commercial access........................................................................3 4.7
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Saudi Arabia

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................35 .....n .................1.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......32 .....n ...............51.8 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................45 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................14 .....n.................4.6 Canada...................................5.2
1.05 Efficacy of corporate boards..................................................17 .....n.................5.0 Sweden .................................5.9
1.06 Reliance on professional management .................................26 .....n.................4.9 Sweden .................................6.5
1.07 Willingness to delegate .........................................................16 .....n.................4.6 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................24 .....n.................5.4 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................23 .....n.................5.2 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................12 .....n.................5.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation ...........................................8 .....n.................4.0 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................13 .....n.................4.0 Switzerland ............................5.6
1.13 Regulation of securities exchanges .......................................17 .....n.................5.1 South Africa...........................6.0
1.14 Property rights .......................................................................19 .....n.................5.4 Switzerland ............................6.4
1.15 Intellectual property protection .............................................22 .....n.................4.8 Sweden .................................6.2
1.16 Diversion of public funds.......................................................20 .....n.................5.1 Sweden .................................6.5
1.17 Public trust of politicians .........................................................5 .....n.................5.4 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................33 .....n.................4.3 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................50 .....n .................1.0 Sweden ...............................15.0 231
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................15 .....n.................4.5 Singapore ..............................6.5
1.22 Judicial independence ...........................................................19 .....n.................5.2 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................18 .....n.................5.8 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................45 .....n.............635.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................51 .....n...............43.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................12 .....n .................7.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................37 .....n ...............27.5 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................37 .....n.................4.3 Switzerland ............................6.1
2.02 Quality of math and science education.................................28 .....n.................4.5 Singapore ..............................6.5
2.03 Extent of staff training...........................................................25 .....n.................4.4 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................26 .....n.................4.7 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................12 .....n.................4.8 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................44 .....n...............29.9 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................19 .....n.................6.0 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.........4 .....n.................5.4 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................12 .....n ...............–9.9 China..................................–24.6
2.10 Time to pay taxes....................................................................5 .....n...............79.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................21 .....n.................5.5 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................39 .....n.................6.1 Norway...................................7.0
2.13 Internet users .......................................................................37 .....n...............30.8 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................42 .....n.................4.2 Sweden................................41.2
2.15 Telephone lines......................................................................43 .....n ...............16.3 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................30 .....n .............102.2 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................34 .....n .................7.7 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Saudi Arabia
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ....................................................1 .....n.................0.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................47 .....n...............22.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................5 .....n.................5.0 Australia.................................2.0
2.21 Time to register property ........................................................1 .....n.................2.0 Multiple (3) ............................2.0
2.22 Time to close a business.......................................................16 .....n .................1.5 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................26 .....n .................1.2 Venezuela ............................14.5
3.02 External vulnerability indicator.................................................1 .....n .................7.0 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP.............................................3 .....n ...............19.2 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .......................7 .....n...............22.5 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio....................................................................4 .....n ...............14.4 Jordan..................................16.8
232 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................21 .....n................17.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................20 .....n................17.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ......................................4 .....n.................5.8 Panama..................................6.0
3.16 Manageability of public debt ................................................10 .....n...............23.0 Chile ......................................6.1
3.17 Credit default swap spreads..................................................13 .....n...............72.2 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................40 .....n ...............51.5 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................40 .....n...............45.4 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................28 .....n...............75.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................42 .....n...............38.4 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................42 .....n...............45.4 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP .....................................n/a .........................n/a Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ..............................................4 .....n.................6.2 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................12 .....n .................1.4 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................47 .....n ...............31.7 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................18 .....n .................1.4 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................36 .....n................17.9 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................42 .....n.................0.2 China ...................................22.0
5.02 IPO proceeds amount ...........................................................45 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................32 .....n.................0.4 China....................................12.6
 Saudi Arabia

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................43 .....n.................0.1 United States ......................36.0
5.05 M&A transaction value to GDP .............................................53 .....n .................1.0 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................49 .....n.................0.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................55 .....n.................0.1 Ireland..................................15.6
5.08 Non–life insurance density ...................................................46 .....n .................1.0 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums .............................3 .....n.................0.2 China .....................................0.3
5.10 Life insurance coverage ........................................................52 .....n.................0.0 India.....................................55.4
5.11 Non–life insurance coverage .................................................39 .....n.................0.3 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................51 .....n.................0.5 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................50 .....n.................0.3 United States.......................10.8
5.14 Share of total number of securitization deals .......................48 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................28 .....n.................0.2 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................39 .....n.................0.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................35 .....n.................0.1 United Kingdom ..................40.8

Derivatives markets
233
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................31 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................32 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................22 .....n.................0.1 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......17 .....n.................0.7 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................30 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................16 .....n .............132.0 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................30 .....n...............85.6 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................11 .....n .............178.1 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................30 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................41 .....n.................2.9 Ireland................................215.3
6.16 Public international bonds to GDP ........................................51 .....n.................0.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................24 .....n.................0.7 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................25 .....n.................5.3 Switzerland ............................6.6
7.02 Venture capital availability ......................................................11 .....n.................3.8 Hong Kong SAR ....................4.4
7.03 Ease of access to credit..........................................................4 .....n.................4.2 Indonesia ...............................4.3
7.04 Financing through local equity market ....................................2 .....n.................4.8 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ..........................................................4 .....n.................4.4 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP...........................................8 .....n ...............10.3 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ..................................................n/a .........................n/a Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Singapore
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .........................................................4.8 US$ bn
27.5% 26.8%
GDP (US$ billions), 2009 .........................................................177.1
n Public debt securities .......175.8
GDP (current prices) per capita, 2009 ............................37,293.4 n Private debt securities........80.7
GDP (PPP) as share (%) of world total, 2009 ........................0.34 n Banking deposits ...............218.5
Compound annual growth rate of real GDP (%), 2005–09 ..3.16 n Equity securities ................180.0
12.3%
Total 655.0
33.4%
Total/GDP 347.9%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index........................................................4 5.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment ...........................................1 6.1

Financial sector liberalization ....................................................16 6.7
Corporate governance...................................................................5 5.6
Legal and regulatory issues .........................................................2 5.6
Contract enforcement....................................................................1 6.4
2nd pillar: Business environment ...............................................2 5.9
Human capital .................................................................................4 5.6
234
Taxes.................................................................................................7 5.8
Infrastructure ................................................................................14 5.5
Cost of doing business ..................................................................1 6.7
3rd pillar: Financial stability........................................................4 5.7
Currency stability........................................................................n/a n/a
Banking system stability................................................................5 5.8
Risk of sovereign debt crisis ......................................................21 5.5
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................13 4.6

Size index .......................................................................................11 4.0
Efficiency index...............................................................................1 6.5
Financial information disclosure................................................33 2.2
5th pillar: Non-banking financial services .............................11 3.6
IPO activity.......................................................................................6 3.9
M&A activity..................................................................................16 3.6
Insurance .......................................................................................10 3.6
Securitization.................................................................................15 3.4
6th pillar: Financial markets........................................................2 5.1
Foreign exchange markets ...........................................................4 6.5
Derivatives markets .......................................................................7 6.2
Equity market development ..........................................................3 5.7
Bond market development..........................................................22 2.8
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................13 4.3

Commercial access........................................................................2 5.0
Retail access.................................................................................15 3.5
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Singapore

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services .......18 .....n...............52.4 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ................................2 .....n.................5.2 Canada...................................5.2
1.05 Efficacy of corporate boards ...................................................4 .....n.................5.6 Sweden .................................5.9
1.06 Reliance on professional management ...................................8 .....n.................5.9 Sweden .................................6.5
1.07 Willingness to delegate .........................................................18 .....n.................4.5 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .........................3 .....n.................6.2 South Africa...........................6.4
1.09 Ethical behavior of firms..........................................................3 .....n.................6.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ........................5 .....n.................5.5 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation ...........................................1 .....n.................5.5 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................53 .....n.................2.0 Switzerland ............................5.6
1.13 Regulation of securities exchanges.........................................3 .....n.................5.8 South Africa...........................6.0
1.14 Property rights.........................................................................3 .....n.................6.3 Switzerland ............................6.4
1.15 Intellectual property protection ...............................................3 .....n.................6.1 Sweden .................................6.2
1.16 Diversion of public funds.........................................................2 .....n.................6.4 Sweden .................................6.5
1.17 Public trust of politicians .........................................................1 .....n.................6.4 Singapore ..............................6.4
1.18 Corruption perceptions index ..................................................2 .....n.................9.2 Denmark................................9.3
1.19 Strength of legal rights index ..................................................1 .....n ...............10.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................33 .....n .................7.0 Sweden ...............................15.0 235
Contract enforcement
1.21 Effectiveness of law-making bodies ........................................1 .....n.................6.5 Singapore ..............................6.5
1.22 Judicial independence ...........................................................16 .....n.................5.6 Sweden .................................6.6
1.23 Irregular payments in judicial decisions...................................3 .....n.................6.7 Sweden .................................6.8
1.24 Time to enforce a contract ......................................................1 .....n .............150.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................2 .....n ...............21.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................1 .....n.................9.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................32 .....n...............25.8 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools .............................................5 .....n.................5.7 Switzerland ............................6.1
2.02 Quality of math and science education...................................1 .....n.................6.5 Singapore ..............................6.5
2.03 Extent of staff training.............................................................4 .....n.................5.5 Sweden .................................5.7
2.04 Local availability of specialized research
and training services..............................................................17 .....n.................5.3 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ............................3 .....n.................5.5 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................21 .....n...............59.8 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ........................................2 .....n.................6.7 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.........1 .....n.................5.8 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................24 .....n.................3.1 China..................................–24.6
2.10 Time to pay taxes....................................................................7 .....n...............84.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure ...............................................3 .....n.................6.6 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .........................................8 .....n.................6.8 Norway...................................7.0
2.13 Internet users .......................................................................13 .....n...............73.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................18 .....n ...............21.7 Sweden................................41.2
2.15 Telephone lines......................................................................17 .....n...............40.2 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................38 .....n...............90.6 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business .....................................................6 .....n.................0.7 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Singapore
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................25 .....n.................2.8 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................1 .....n .................1.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................2 .....n.................3.0 Australia.................................2.0
2.21 Time to register property ........................................................5 .....n.................5.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................3 .....n.................0.8 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................18 .....n.................2.3 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP.............................................2 .....n...............22.0 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator....................................................1 .....n.................9.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................37 .....n.................4.0 Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................25 .....n ...............10.5 Jordan..................................16.8
236 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................26 .....n.................5.3 Panama..................................6.0
3.16 Manageability of public debt ................................................55 .....n .............113.1 Chile ......................................6.1
3.17 Credit default swap spreads ...................................................9 .....n...............50.1 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................19 .....n .............110.6 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................16 .....n.................2.2 Egypt ...................................23.8
4.03 Financial system deposits to GDP ..........................................7 .....n .............115.9 Hong Kong SAR ................285.2
4.04 M2 to GDP ..............................................................................9 .....n .............144.1 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................22 .....n...............90.9 United States.....................210.7
4.06 Bank deposits to GDP .............................................................9 .....n .............112.6 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................14 .....n .................1.1 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ..............................................8 .....n.................5.2 Netherlands ...........................6.5
4.09 Bank overhead costs ...............................................................1 .....n.................0.5 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................10 .....n .................1.1 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................10 .....n.................2.3 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................26 .....n...............40.3 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................15 .....n .................1.2 China ...................................22.0
5.02 IPO proceeds amount .............................................................3 .....n .................1.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................13 .....n.................2.1 China....................................12.6
 Singapore

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................23 .....n.................0.7 United States ......................36.0
5.05 M&A transaction value to GDP ...............................................2 .....n ...............12.6 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................18 .....n .................1.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................14 .....n.................5.1 Ireland..................................15.6
5.08 Non–life insurance density ...................................................16 .....n.................2.9 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................22 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................36 .....n.................0.2 India.....................................55.4
5.11 Non–life insurance coverage .................................................47 .....n.................0.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ..............................3 .....n.................3.5 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ..............................................................7 .....n.................3.2 United States.......................10.8
5.14 Share of total number of securitization deals .......................27 .....n.................0.3 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ..............................................5 .....n .................7.0 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ...........................4 .....n.................5.9 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ............................................5 .....n.................5.3 United Kingdom ..................40.8

Derivatives markets
237
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................15 .....n.................0.5 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps................................6 .....n.................3.5 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options..............................9 .....n.................0.6 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ........7 .....n.................3.1 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options .....................5 .....n.................4.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio .....................................................8 .....n.............184.6 Italy....................................348.2
6.10 Stock market capitalization to GDP .........................................8 .....n .............172.5 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP..........................................8 .....n.............238.1 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people.....................3 .....n .................1.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............26 .....n ...............14.4 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP..............11 .....n...............45.4 Japan .................................184.6
6.15 Private international bonds to GDP .......................................19 .....n...............29.9 Ireland................................215.3
6.16 Public international bonds to GDP ........................................46 .....n.................0.2 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................21 .....n .................1.2 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication ...............................................9 .....n.................6.1 Switzerland ............................6.6
7.02 Venture capital availability........................................................3 .....n.................4.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................19 .....n.................3.5 Indonesia ...............................4.3
7.04 Financing through local equity market ....................................3 .....n.................4.8 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ..........................................................2 .....n.................4.5 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP...........................................3 .....n ...............12.8 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts .....................................6 .....n......223,624.7 Japan............................717,241.6
7.08 Commercial bank branches ...................................................38 .....n ...............10.5 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................28 .....n...............49.8 Canada...............................218.5
7.10 Total number of point of sale (POS) devices .........................12 .....n ..........2,091.4 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Slovak Republic
Key indicators Financial assets by major type, 2008
5.2%
Population (millions), 2009 .........................................................5.4 US$ bn
GDP (US$ billions), 2009 ...........................................................88.2 30.7%
n Public debt securities .........27.3
GDP (current prices) per capita, 2009 ............................16,281.6 n Private debt securities..........5.7
GDP (PPP) as share (%) of world total, 2009 ........................0.17 n Banking deposits .................50.9
Compound annual growth rate of real GDP (%), 2005–09 ..3.96 57.2%
n Equity securities ....................5.1
6.4%
Total 89.0

Total/GDP 93.5%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................36 3.3

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................40 3.8

Financial sector liberalization ....................................................41 3.5
Corporate governance.................................................................28 4.4
Legal and regulatory issues .......................................................35 3.5
Contract enforcement..................................................................41 3.8
2nd pillar: Business environment .............................................27 4.7
Human capital ...............................................................................37 4.0
238
Taxes...............................................................................................31 4.7
Infrastructure ................................................................................28 4.5
Cost of doing business ................................................................22 5.5
3rd pillar: Financial stability......................................................14 5.0
Currency stability..........................................................................20 4.3
Banking system stability..............................................................21 5.0
Risk of sovereign debt crisis ......................................................19 5.7
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................36 3.4

Size index .......................................................................................40 1.8
Efficiency index.............................................................................20 5.6
Financial information disclosure................................................30 2.4
5th pillar: Non-banking financial services .............................51 1.5
IPO activity...................................................................................n/a n/a
M&A activity..................................................................................55 1.0
Insurance .......................................................................................44 2.1
Securitization.................................................................................47 1.3
6th pillar: Financial markets......................................................49 1.5
Foreign exchange markets .........................................................40 1.0
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................50 1.4
Bond market development..........................................................33 2.0
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................33 3.2

Commercial access......................................................................43 3.2
Retail access.................................................................................17 3.3
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Slovak Republic

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................34 .....n .................1.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......38 .....n...............43.9 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................47 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................13 .....n.................4.6 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................22 .....n.................4.9 Sweden .................................5.9
1.06 Reliance on professional management .................................25 .....n.................4.9 Sweden .................................6.5
1.07 Willingness to delegate.........................................................32 .....n.................3.9 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................34 .....n.................4.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................44 .....n.................3.6 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................38 .....n.................4.2 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................38 .....n.................2.8 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................28 .....n.................3.2 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................45 .....n.................3.9 South Africa...........................6.0
1.14 Property rights.......................................................................40 .....n.................4.2 Switzerland ............................6.4
1.15 Intellectual property protection .............................................33 .....n.................3.8 Sweden .................................6.2
1.16 Diversion of public funds.......................................................51 .....n.................2.5 Sweden .................................6.5
1.17 Public trust of politicians .......................................................54 .....n .................1.7 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................30 .....n.................4.5 Denmark................................9.3
1.19 Strength of legal rights index ..................................................4 .....n.................9.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................36 .....n.................6.0 Sweden ...............................15.0 239
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................41 .....n.................3.0 Singapore ..............................6.5
1.22 Judicial independence ...........................................................49 .....n.................2.9 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................53 .....n.................2.9 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................35 .....n.............565.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract ........................11 .....n...............30.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................44 .....n.................4.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................43 .....n...............30.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................56 .....n.................3.4 Switzerland ............................6.1
2.02 Quality of math and science education.................................36 .....n.................4.1 Singapore ..............................6.5
2.03 Extent of staff training...........................................................39 .....n.................3.9 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................30 .....n.................4.6 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................42 .....n.................3.6 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................28 .....n...............50.8 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................30 .....n.................5.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......54 .....n.................3.4 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................32 .....n .............257.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................33 .....n.................4.4 Switzerland ............................6.8
2.12 Quality of telephone infrastructure........................................15 .....n.................6.6 Norway...................................7.0
2.13 Internet users .......................................................................19 .....n...............66.1 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................29 .....n................11.2 Sweden................................41.2
2.15 Telephone lines......................................................................39 .....n...............20.3 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................25 .....n ..............111.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business....................................................15 .....n.................2.0 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Slovak Republic
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ....................................................2 .....n.................0.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................39 .....n...............18.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................30 .....n ...............16.0 Australia.................................2.0
2.21 Time to register property ......................................................17 .....n................17.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................43 .....n.................4.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................11 .....n.................3.9 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................50 .....n ...............–5.0 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)...........................................................14 .....n..............–57.6 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................27 .....n .................1.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................32 .....n.................4.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................24 .....n.................5.0 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................22 .....n.................4.9 Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
240 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................24 .....n ...............16.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................22 .....n ...............16.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................20 .....n.................5.4 Panama..................................6.0
3.16 Manageability of public debt ................................................17 .....n...............35.7 Chile ......................................6.1
3.17 Credit default swap spreads..................................................18 .....n ...............91.7 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................38 .....n...............53.5 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................40 .....n.................0.0 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................38 .....n...............48.5 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................37 .....n...............59.7 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................38 .....n...............42.5 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................39 .....n...............48.6 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................27 .....n.................4.4 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................27 .....n.................2.3 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................20 .....n.................0.6 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................32 .....n.................2.3 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................21 .....n.................4.3 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................24 .....n...............44.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................19 .....n .................1.4 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share .................................................................n/a .........................n/a China ...................................22.0
5.02 IPO proceeds amount ..........................................................n/a .........................n/a Kazakhstan.............................1.1
5.03 Share of world IPOs .............................................................n/a .........................n/a China....................................12.6
 Slovak Republic

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................55 .....n.................0.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................55 .....n.................0.9 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................47 .....n.................0.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................33 .....n .................1.5 Ireland..................................15.6
5.08 Non–life insurance density ...................................................35 .....n .................1.7 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................17 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................46 .....n.................0.1 India.....................................55.4
5.11 Non–life insurance coverage .................................................54 .....n.................0.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................41 .....n.................0.8 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................46 .....n.................0.5 United States.......................10.8
5.14 Share of total number of securitization deals .......................48 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................44 .....n.................0.0 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................43 .....n.................0.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................30 .....n.................0.1 United Kingdom ..................40.8

Derivatives markets
241
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................33 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................51 .....n.................0.4 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................51 .....n .................7.8 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................44 .....n.................0.0 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ...................16 .....n.................0.3 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............30 .....n.................5.9 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............28 .....n...............26.1 Japan .................................184.6
6.15 Private international bonds to GDP .......................................50 .....n.................0.7 Ireland................................215.3
6.16 Public international bonds to GDP.........................................15 .....n .................7.4 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................33 .....n.................4.8 Switzerland ............................6.6
7.02 Venture capital availability......................................................40 .....n.................2.6 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................25 .....n.................3.2 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................53 .....n.................2.6 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................28 .....n.................3.2 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................27 .....n.................3.9 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts....................................11 .....n......185,782.7 Japan............................717,241.6
7.08 Commercial bank branches ...................................................13 .....n...............26.6 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................29 .....n...............49.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................21 .....n .............713.1 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

South Africa
Key indicators Financial assets by major type, 2008
8.6%
Population (millions), 2009 .......................................................49.3 US$ bn
9.8%
GDP (US$ billions), 2009 .........................................................287.2
n Public debt securities .........68.9
GDP (current prices) per capita, 2009 ..............................5,823.6 n Private debt securities........78.5
GDP (PPP) as share (%) of world total, 2009 ........................0.70 20.3% n Banking deposits ...............162.6
Compound annual growth rate of real GDP (%), 2005–09 ..2.55 61.3% n Equity securities ................491.3

Total 801.3

Total/GDP 289.5%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................31 3.5

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................28 4.4

Financial sector liberalization ....................................................45 3.2
Corporate governance.................................................................12 5.3
Legal and regulatory issues .......................................................22 4.2
Contract enforcement..................................................................21 5.0
2nd pillar: Business environment .............................................45 3.9
Human capital ...............................................................................52 3.4
242
Taxes...............................................................................................36 4.4
Infrastructure ................................................................................49 3.0
Cost of doing business ................................................................37 4.8
3rd pillar: Financial stability......................................................28 4.6
Currency stability..........................................................................34 3.7
Banking system stability..............................................................15 5.2
Risk of sovereign debt crisis ......................................................37 4.6
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................31 3.7

Size index .......................................................................................29 2.8
Efficiency index.............................................................................31 5.1
Financial information disclosure................................................28 2.6
5th pillar: Non-banking financial services .............................19 2.8
IPO activity.....................................................................................34 1.7
M&A activity..................................................................................20 3.0
Insurance .........................................................................................4 4.5
Securitization.................................................................................35 1.9
6th pillar: Financial markets......................................................27 2.5
Foreign exchange markets .........................................................22 1.3
Derivatives markets .....................................................................20 2.5
Equity market development ........................................................14 3.9
Bond market development..........................................................40 1.8
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................43 2.9

Commercial access......................................................................21 3.7
Retail access.................................................................................37 2.2
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 South Africa

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................49 .....n ...............–1.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......43 .....n...............28.4 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................26 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ................................6 .....n.................5.0 Canada...................................5.2
1.05 Efficacy of corporate boards ...................................................2 .....n.................5.8 Sweden .................................5.9
1.06 Reliance on professional management .................................16 .....n.................5.5 Sweden .................................6.5
1.07 Willingness to delegate.........................................................24 .....n.................4.1 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .........................1 .....n.................6.4 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................27 .....n.................4.5 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ........................4 .....n.................5.6 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................34 .....n.................3.0 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................40 .....n.................2.8 Switzerland ............................5.6
1.13 Regulation of securities exchanges.........................................1 .....n.................6.0 South Africa...........................6.0
1.14 Property rights.......................................................................20 .....n.................5.4 Switzerland ............................6.4
1.15 Intellectual property protection .............................................21 .....n.................4.9 Sweden .................................6.2
1.16 Diversion of public funds.......................................................39 .....n.................3.1 Sweden .................................6.5
1.17 Public trust of politicians .......................................................38 .....n.................2.4 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................29 .....n.................4.7 Denmark................................9.3
1.19 Strength of legal rights index ..................................................4 .....n.................9.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................18 .....n.................9.5 Sweden ...............................15.0 243
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................17 .....n.................4.4 Singapore ..............................6.5
1.22 Judicial independence ...........................................................26 .....n.................4.7 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................23 .....n.................5.3 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................41 .....n.............600.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract ........................11 .....n...............30.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................9 .....n.................8.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................49 .....n...............33.2 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools............................................17 .....n.................5.1 Switzerland ............................6.1
2.02 Quality of math and science education.................................57 .....n.................2.0 Singapore ..............................6.5
2.03 Extent of staff training...........................................................19 .....n.................4.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................34 .....n.................4.4 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................56 .....n.................3.0 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................51 .....n ...............15.4 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................23 .....n.................5.7 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.........8 .....n.................5.0 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................44 .....n...............25.6 China..................................–24.6
2.10 Time to pay taxes..................................................................24 .....n.............200.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................32 .....n.................4.6 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................56 .....n.................4.5 Norway...................................7.0
2.13 Internet users .......................................................................53 .....n.................8.4 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................52 .....n.................0.9 Sweden................................41.2
2.15 Telephone lines......................................................................51 .....n.................8.9 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................19 .....n .............118.3 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................28 .....n.................5.9 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

South Africa
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................52 .....n.................8.7 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................39 .....n...............18.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................36 .....n...............22.0 Australia.................................2.0
2.21 Time to register property ......................................................24 .....n...............24.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................25 .....n.................2.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................47 .....n ...............–1.8 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................22 .....n ...............74.5 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................51 .....n ...............–6.1 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies)......................10 .....n...............24.4 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................39 .....n.................3.8 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................20 .....n.................4.7 Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................16 .....n................11.5 Jordan..................................16.8
244 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................24 .....n ...............16.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................32 .....n ...............12.7 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................48 .....n.................3.8 Panama..................................6.0
3.16 Manageability of public debt ................................................15 .....n...............30.0 Chile ......................................6.1
3.17 Credit default swap spreads .................................................35 .....n .............172.7 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................24 .....n ...............87.7 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................33 .....n.................0.5 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................26 .....n...............63.3 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................33 .....n...............69.4 Hong Kong SAR ................329.5
4.05 Private credit to GDP...............................................................8 .....n .............162.4 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................29 .....n...............63.4 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator.............................................19 .....n.................4.7 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................46 .....n.................4.4 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................41 .....n.................2.8 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................28 .....n.................5.5 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................22 .....n...............54.7 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................39 .....n.................0.3 China ...................................22.0
5.02 IPO proceeds amount ...........................................................35 .....n.................0.2 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................17 .....n .................1.6 China....................................12.6
 South Africa

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................20 .....n.................0.7 United States ......................36.0
5.05 M&A transaction value to GDP ...............................................9 .....n.................8.9 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................24 .....n.................0.7 United States ......................23.0
Insurance
5.07 Life insurance density .............................................................2 .....n ...............10.0 Ireland..................................15.6
5.08 Non–life insurance density ...................................................17 .....n.................2.9 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................19 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ..........................................................6 .....n.................4.9 India.....................................55.4
5.11 Non–life insurance coverage .................................................13 .....n .................1.4 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................11 .....n.................2.1 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................27 .....n .................1.3 United States.......................10.8
5.14 Share of total number of securitization deals .......................37 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................26 .....n.................0.3 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................23 .....n.................0.2 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................22 .....n.................0.4 United Kingdom ..................40.8

Derivatives markets
245
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................13 .....n.................0.7 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................23 .....n.................0.1 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................14 .....n.................0.3 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......29 .....n.................0.1 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................31 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................28 .....n...............59.6 Italy....................................348.2
6.10 Stock market capitalization to GDP .........................................3 .....n.............308.4 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP ........................................10 .....n..............197.4 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................23 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............25 .....n ...............16.3 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............29 .....n...............25.9 Japan .................................184.6
6.15 Private international bonds to GDP .......................................27 .....n.................8.5 Ireland................................215.3
6.16 Public international bonds to GDP ........................................28 .....n.................2.9 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................37 .....n.................0.0 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication ...............................................5 .....n.................6.4 Switzerland ............................6.6
7.02 Venture capital availability......................................................26 .....n.................3.0 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................44 .....n.................2.5 Indonesia ...............................4.3
7.04 Financing through local equity market ....................................5 .....n.................4.7 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................26 .....n.................3.2 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................37 .....n.................3.1 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................25 .....n ........83,913.4 Japan............................717,241.6
7.08 Commercial bank branches ...................................................42 .....n.................8.0 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................26 .....n...............52.4 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................14 .....n.................4.1 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Spain
Key indicators Financial assets by major type, 2008
13.8% 9.3%
Population (millions), 2009 .......................................................45.8 US$ bn
GDP (US$ billions), 2009 ......................................................1,464.0
n Public debt securities .......636.1
GDP (current prices) per capita, 2009 ............................31,946.3 n Private debt securities...3,034.0
GDP (PPP) as share (%) of world total, 2009 ........................1.96 n Banking deposits ............2,255.4
32.8%
Compound annual growth rate of real GDP (%), 2005–09 ..0.92 44.2% n Equity securities ................946.1

Total 6,871.6

Total/GDP 428.9%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................14 4.4

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................22 5.0

Financial sector liberalization ......................................................1 7.0
Corporate governance.................................................................33 4.3
Legal and regulatory issues .......................................................24 4.2
Contract enforcement..................................................................30 4.4
2nd pillar: Business environment .............................................23 4.9
Human capital ...............................................................................23 4.6
246
Taxes...............................................................................................21 5.0
Infrastructure ................................................................................20 5.3
Cost of doing business ................................................................43 4.5
3rd pillar: Financial stability......................................................47 3.9
Currency stability..........................................................................46 3.1
Banking system stability..............................................................44 3.8
Risk of sovereign debt crisis ......................................................31 4.9
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services........................................4 5.2

Size index .........................................................................................5 5.4
Efficiency index...............................................................................8 6.0
Financial information disclosure................................................20 3.4
5th pillar: Non-banking financial services .............................10 3.6
IPO activity.....................................................................................18 2.8
M&A activity..................................................................................10 4.6
Insurance .......................................................................................23 2.9
Securitization...................................................................................8 4.4
6th pillar: Financial markets......................................................14 4.0
Foreign exchange markets .........................................................21 1.4
Derivatives markets .....................................................................17 3.3
Equity market development ..........................................................6 5.3
Bond market development............................................................5 4.9
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................12 4.3

Commercial access......................................................................47 3.1
Retail access...................................................................................5 5.4
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Spain

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n...............72.8 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................43 .....n.................4.0 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................46 .....n.................4.3 Sweden .................................5.9
1.06 Reliance on professional management .................................33 .....n.................4.6 Sweden .................................6.5
1.07 Willingness to delegate.........................................................37 .....n.................3.7 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................32 .....n.................4.9 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................24 .....n.................4.7 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................39 .....n.................4.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................40 .....n.................2.8 Singapore ..............................5.5
1.12 Centralization of economic policymaking ................................3 .....n.................5.1 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................52 .....n.................3.5 South Africa...........................6.0
1.14 Property rights.......................................................................27 .....n.................4.9 Switzerland ............................6.4
1.15 Intellectual property protection .............................................25 .....n.................4.3 Sweden .................................6.2
1.16 Diversion of public funds.......................................................27 .....n.................4.0 Sweden .................................6.5
1.17 Public trust of politicians .......................................................34 .....n.................2.6 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................21 .....n.................6.1 Denmark................................9.3
1.19 Strength of legal rights index ................................................30 .....n.................6.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................3 .....n................11.0 Sweden ...............................15.0 247
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................33 .....n.................3.5 Singapore ..............................6.5
1.22 Judicial independence ...........................................................37 .....n.................3.8 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................25 .....n.................5.2 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................32 .....n .............515.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................43 .....n...............39.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................39 .....n.................5.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts ...................................................15 .....n................17.2 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools .............................................7 .....n.................5.6 Switzerland ............................6.1
2.02 Quality of math and science education.................................48 .....n.................3.1 Singapore ..............................6.5
2.03 Extent of staff training...........................................................46 .....n.................3.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................23 .....n.................5.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................31 .....n.................3.9 Switzerland ............................5.7
2.06 Tertiary enrollment.................................................................12 .....n...............68.9 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................25 .....n.................5.6 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......50 .....n.................3.6 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................17 .....n ...............–5.1 China..................................–24.6
2.10 Time to pay taxes..................................................................27 .....n .............213.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................16 .....n.................5.8 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................35 .....n.................6.2 Norway...................................7.0
2.13 Internet users .......................................................................24 .....n...............56.7 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................20 .....n...............20.2 Sweden................................41.2
2.15 Telephone lines......................................................................12 .....n...............45.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................20 .....n .............118.0 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................45 .....n ...............15.0 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Spain
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................48 .....n .................7.2 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................31 .....n ...............15.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................52 .....n ...............47.0 Australia.................................2.0
2.21 Time to register property ......................................................20 .....n...............18.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................8 .....n .................1.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................18 .....n.................2.3 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................54 .....n ...............–8.2 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)...........................................................17 .....n .............–93.6 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................51 .....n.................2.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................35 .....n.................4.3 Ireland....................................6.8
3.10 Financial Stress Index............................................................14 .....n.................3.2 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................28 .....n.................9.6 Jordan..................................16.8
248 3.12 Output loss during banking crises.........................................53 .....n..............107.3 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................17 .....n...............18.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................17 .....n................17.7 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................45 .....n.................4.1 Panama..................................6.0
3.16 Manageability of public debt ................................................37 .....n...............53.2 Chile ......................................6.1
3.17 Credit default swap spreads .................................................43 .....n.............245.9 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .......................................4 .....n..............197.8 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................25 .....n .................1.3 Egypt ...................................23.8
4.03 Financial system deposits to GDP ..........................................5 .....n .............136.0 Hong Kong SAR ................285.2
4.04 M2 to GDP ..............................................................................3 .....n..............167.4 Hong Kong SAR ................329.5
4.05 Private credit to GDP...............................................................6 .....n.............188.5 United States.....................210.7
4.06 Bank deposits to GDP .............................................................5 .....n .............136.9 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................10 .....n.................3.1 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................22 .....n.................4.6 Netherlands ...........................6.5
4.09 Bank overhead costs ...............................................................5 .....n .................1.1 Singapore ..............................0.5
4.10 Public ownership of banks ......................................................1 .....n.................0.0 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................19 .....n .................1.4 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................25 .....n.................5.1 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................44 .....n .................7.6 Argentina ...........................100.0
4.14 Public credit registry coverage ................................................4 .....n...............45.3 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ....................................................................7 .....n.................3.3 China ...................................22.0
5.02 IPO proceeds amount ...........................................................19 .....n.................0.4 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................28 .....n.................0.5 China....................................12.6
 Spain

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ..................................................................8 .....n.................3.5 United States ......................36.0
5.05 M&A transaction value to GDP .............................................13 .....n.................8.1 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................12 .....n.................2.4 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................23 .....n.................2.7 Ireland..................................15.6
5.08 Non–life insurance density ...................................................15 .....n.................3.0 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................20 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage.........................................................14 .....n .................1.2 India.....................................55.4
5.11 Non–life insurance coverage .................................................15 .....n .................1.4 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................43 .....n.................0.6 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ..............................................................6 .....n.................3.4 United States.......................10.8
5.14 Share of total number of securitization deals........................11 .....n .................1.3 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover.............................................19 .....n.................0.5 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................18 .....n.................0.5 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................23 .....n.................0.4 United Kingdom ..................40.8

Derivatives markets
249
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................21 .....n.................0.2 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................13 .....n .................1.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................15 .....n.................0.3 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......20 .....n.................0.3 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options....................17 .....n.................0.3 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio .....................................................7 .....n.............186.2 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................17 .....n .............128.5 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP..........................................5 .....n .............276.4 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people.....................7 .....n.................0.8 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ..............3 .....n...............88.2 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............20 .....n...............36.3 Japan .................................184.6
6.15 Private international bonds to GDP .........................................4 .....n .............109.9 Ireland................................215.3
6.16 Public international bonds to GDP.........................................13 .....n.................8.1 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................15 .....n .................1.7 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................21 .....n.................5.7 Switzerland ............................6.6
7.02 Venture capital availability......................................................38 .....n.................2.6 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................57 .....n .................1.4 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................47 .....n.................3.3 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................46 .....n.................2.5 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................23 .....n.................4.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................27 .....n ........78,047.1 Japan............................717,241.6
7.08 Commercial bank branches .....................................................6 .....n...............38.2 Ireland ..................................57.3
7.09 Total number of ATMs.............................................................4 .....n .............154.8 Canada...............................218.5
7.10 Total number of point of sale (POS) devices...........................3 .....n...........3,711.3 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Sweden
Key indicators Financial assets by major type, 2008
13.8%
Population (millions), 2009 .........................................................9.2 19.9% US$ bn
GDP (US$ billions), 2009 .........................................................405.4
n Public debt securities .......175.8
GDP (current prices) per capita, 2009 ............................43,986.2 n Private debt securities......610.3
GDP (PPP) as share (%) of world total, 2009 ........................0.48 n Banking deposits ...............231.3
18.2%
Compound annual growth rate of real GDP (%), 2005–09 ..0.41 n Equity securities ................252.5

48.1% Total 1,270.0

Total/GDP 265.2%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................12 4.6

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment ...........................................2 6.1

Financial sector liberalization ......................................................1 7.0
Corporate governance...................................................................1 6.1
Legal and regulatory issues .........................................................3 5.6
Contract enforcement..................................................................14 5.5
2nd pillar: Business environment ...............................................1 6.0
Human capital .................................................................................2 5.6
250
Taxes.................................................................................................4 6.1
Infrastructure ..................................................................................3 6.3
Cost of doing business ................................................................13 5.9
3rd pillar: Financial stability......................................................27 4.6
Currency stability..........................................................................32 3.9
Banking system stability..............................................................43 3.9
Risk of sovereign debt crisis ........................................................5 6.4
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................10 4.8

Size index .......................................................................................13 3.9
Efficiency index...............................................................................7 6.1
Financial information disclosure..................................................3 4.0
5th pillar: Non-banking financial services .............................26 2.4
IPO activity.....................................................................................44 1.3
M&A activity..................................................................................17 3.5
Insurance .......................................................................................27 2.7
Securitization.................................................................................32 2.2
6th pillar: Financial markets......................................................17 3.6
Foreign exchange markets .........................................................16 1.8
Derivatives markets .....................................................................15 4.2
Equity market development ..........................................................9 4.7
Bond market development..........................................................17 3.5
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access..........................................................7 4.6

Commercial access........................................................................4 4.6
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Sweden

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n ...............77.4 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................11 .....n.................4.6 Canada...................................5.2
1.05 Efficacy of corporate boards ...................................................1 .....n.................5.9 Sweden .................................5.9
1.06 Reliance on professional management ...................................1 .....n.................6.5 Sweden .................................6.5
1.07 Willingness to delegate...........................................................1 .....n.................6.5 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .........................2 .....n.................6.3 South Africa...........................6.4
1.09 Ethical behavior of firms..........................................................1 .....n.................6.8 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ........................1 .....n.................6.0 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation ...........................................6 .....n.................4.0 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................20 .....n.................3.6 Switzerland ............................5.6
1.13 Regulation of securities exchanges.........................................2 .....n.................5.9 South Africa...........................6.0
1.14 Property rights.........................................................................5 .....n.................6.3 Switzerland ............................6.4
1.15 Intellectual property protection ...............................................1 .....n.................6.2 Sweden .................................6.2
1.16 Diversion of public funds.........................................................1 .....n.................6.5 Sweden .................................6.5
1.17 Public trust of politicians .........................................................2 .....n.................5.8 Singapore ..............................6.4
1.18 Corruption perceptions index ..................................................2 .....n.................9.2 Denmark................................9.3
1.19 Strength of legal rights index ................................................37 .....n.................5.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................1 .....n ...............15.0 Sweden ...............................15.0 251
Contract enforcement
1.21 Effectiveness of law-making bodies ........................................2 .....n.................5.9 Singapore ..............................6.5
1.22 Judicial independence .............................................................1 .....n.................6.6 Sweden .................................6.6
1.23 Irregular payments in judicial decisions...................................1 .....n.................6.8 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................28 .....n.............508.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract ........................11 .....n...............30.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................27 .....n.................5.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................44 .....n ...............31.2 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools .............................................6 .....n.................5.6 Switzerland ............................6.1
2.02 Quality of math and science education .................................11 .....n.................5.0 Singapore ..............................6.5
2.03 Extent of staff training.............................................................1 .....n.................5.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services ...............................................................3 .....n.................6.1 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor...........................10 .....n.................4.8 Switzerland ............................5.7
2.06 Tertiary enrollment ..................................................................8 .....n...............75.2 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ........................................1 .....n.................6.8 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.........7 .....n.................5.1 Singapore ..............................5.8
2.09 Marginal tax variation.............................................................11 .....n .............–10.3 China..................................–24.6
2.10 Time to pay taxes ..................................................................14 .....n .............122.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure ...............................................6 .....n.................6.4 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .........................................4 .....n.................6.9 Norway...................................7.0
2.13 Internet users .........................................................................1 .....n ...............87.8 Sweden ................................87.8
2.14 Broadband Internet subscribers ..............................................1 .....n ...............41.2 Sweden................................41.2
2.15 Telephone lines........................................................................4 .....n ...............57.8 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................36 .....n...............92.0 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business .....................................................5 .....n.................0.6 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Sweden
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................26 .....n.................3.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................20 .....n.................9.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................27 .....n ...............15.0 Australia.................................2.0
2.21 Time to register property ......................................................15 .....n ...............15.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................25 .....n.................2.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................44 .....n ...............–1.5 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP ...........................................11 .....n .................7.6 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)...........................................................12 .....n .............–19.3 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................53 .....n.................3.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator ..................................................10 .....n.................6.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index .............................................................9 .....n .................1.4 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................24 .....n ...............10.5 Jordan..................................16.8
252 3.12 Output loss during banking crises.........................................50 .....n .............103.1 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................29 .....n.................5.1 Panama..................................6.0
3.16 Manageability of public debt ................................................18 .....n...............36.1 Chile ......................................6.1
3.17 Credit default swap spreads ...................................................5 .....n...............42.0 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................10 .....n .............132.0 Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................32 .....n...............52.3 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................34 .....n ...............67.0 Hong Kong SAR ................329.5
4.05 Private credit to GDP .............................................................11 .....n .............124.1 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................35 .....n...............52.6 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ........................................3 .....n ...............10.5 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................36 .....n.................4.0 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................13 .....n .................1.4 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................23 .....n.................3.0 Austria ...................................0.0
4.11 Bank operating costs to assets ...............................................8 .....n.................0.9 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ...............................9 .....n.................2.0 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage................................................1 .....n .............100.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................40 .....n.................0.3 China ...................................22.0
5.02 IPO proceeds amount ...........................................................44 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................24 .....n.................0.5 China....................................12.6
 Sweden

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................17 .....n .................1.1 United States ......................36.0
5.05 M&A transaction value to GDP .............................................10 .....n.................8.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................14 .....n.................2.0 United States ......................23.0
Insurance
5.07 Life insurance density............................................................10 .....n.................6.1 Ireland..................................15.6
5.08 Non–life insurance density ...................................................29 .....n .................1.9 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................24 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................27 .....n.................0.6 India.....................................55.4
5.11 Non–life insurance coverage .................................................44 .....n.................0.2 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................30 .....n .................1.0 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................25 .....n .................1.6 United States.......................10.8
5.14 Share of total number of securitization deals .......................35 .....n.................0.2 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................18 .....n.................0.6 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................20 .....n.................0.4 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover...........................................12 .....n .................1.5 United Kingdom ..................40.8

Derivatives markets
253
6.04 Interest rate derivatives turnover: Forward rate
agreements .............................................................................5 .....n.................2.6 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................21 .....n.................0.1 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options ............................10 .....n.................0.5 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......32 .....n.................0.1 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................13 .....n.................0.7 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio .....................................................4 .....n .............212.4 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................13 .....n .............141.0 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP..........................................7 .....n.............270.9 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ...................17 .....n.................0.2 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ..............7 .....n...............60.5 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............26 .....n...............28.9 Japan .................................184.6
6.15 Private international bonds to GDP .........................................7 .....n...............79.6 Ireland................................215.3
6.16 Public international bonds to GDP.........................................19 .....n.................6.2 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................29 .....n.................0.3 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication ...............................................6 .....n.................6.4 Switzerland ............................6.6
7.02 Venture capital availability........................................................5 .....n.................4.0 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................34 .....n.................2.8 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................14 .....n.................4.4 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ..........................................................9 .....n.................4.2 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP...........................................6 .....n ...............10.8 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................14 .....n...............25.9 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................37 .....n...............36.6 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Switzerland
Key indicators Financial assets by major type, 2008
8.8%
Population (millions), 2009 .........................................................7.3 US$ bn
GDP (US$ billions), 2009 .........................................................494.6
36.8% n Public debt securities .......206.6
GDP (current prices) per capita, 2009 ............................67,559.6 25.5% n Private debt securities......598.6
GDP (PPP) as share (%) of world total, 2009 ........................0.45 n Banking deposits ...............677.3
Compound annual growth rate of real GDP (%), 2005–09 ..1.49 n Equity securities ................862.7

Total 2,345.2
28.9%
Total/GDP 468.8%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index........................................................8 4.7

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................11 5.7

Financial sector liberalization ....................................................18 6.5
Corporate governance...................................................................9 5.4
Legal and regulatory issues .........................................................1 5.7
Contract enforcement..................................................................20 5.1
2nd pillar: Business environment ...............................................5 5.8
Human capital .................................................................................3 5.6
254
Taxes...............................................................................................15 5.4
Infrastructure ..................................................................................5 6.2
Cost of doing business ................................................................12 6.0
3rd pillar: Financial stability........................................................5 5.6
Currency stability..........................................................................13 4.9
Banking system stability................................................................7 5.6
Risk of sovereign debt crisis ........................................................2 6.4
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................15 4.5

Size index .........................................................................................7 5.0
Efficiency index.............................................................................23 5.4
Financial information disclosure................................................42 1.7
5th pillar: Non-banking financial services .............................20 2.7
IPO activity.....................................................................................42 1.4
M&A activity..................................................................................12 3.9
Insurance .........................................................................................9 3.9
Securitization.................................................................................38 1.8
6th pillar: Financial markets........................................................3 5.0
Foreign exchange markets ...........................................................5 6.2
Derivatives markets .....................................................................14 4.8
Equity market development ..........................................................2 5.7
Bond market development..........................................................14 3.7
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................24 3.6

Commercial access......................................................................12 4.0
Retail access.................................................................................22 3.1
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Switzerland

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n...............56.3 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................31 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ................................5 .....n.................5.0 Canada...................................5.2
1.05 Efficacy of corporate boards..................................................10 .....n.................5.2 Sweden .................................5.9
1.06 Reliance on professional management ...................................9 .....n.................5.9 Sweden .................................6.5
1.07 Willingness to delegate...........................................................5 .....n.................5.2 Sweden .................................6.5
1.08 Strength of auditing and reporting standards........................17 .....n.................5.6 South Africa...........................6.4
1.09 Ethical behavior of firms..........................................................5 .....n.................6.4 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................24 .....n.................4.7 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation ...........................................5 .....n.................4.2 Singapore ..............................5.5
1.12 Centralization of economic policymaking ................................1 .....n.................5.6 Switzerland ............................5.6
1.13 Regulation of securities exchanges.........................................7 .....n.................5.6 South Africa...........................6.0
1.14 Property rights.........................................................................1 .....n.................6.4 Switzerland ............................6.4
1.15 Intellectual property protection ...............................................4 .....n.................6.0 Sweden .................................6.2
1.16 Diversion of public funds.........................................................5 .....n.................6.1 Sweden .................................6.5
1.17 Public trust of politicians .........................................................7 .....n.................5.2 Singapore ..............................6.4
1.18 Corruption perceptions index ..................................................4 .....n.................9.0 Denmark................................9.3
1.19 Strength of legal rights index ................................................12 .....n.................8.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................18 .....n.................9.5 Sweden ...............................15.0 255
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................10 .....n.................5.0 Singapore ..............................6.5
1.22 Judicial independence .............................................................3 .....n.................6.4 Sweden .................................6.6
1.23 Irregular payments in judicial decisions...................................7 .....n.................6.5 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................21 .....n..............417.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract........................19 .....n ...............31.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................54 .....n.................3.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................28 .....n...............24.0 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools .............................................1 .....n.................6.1 Switzerland ............................6.1
2.02 Quality of math and science education...................................4 .....n.................5.8 Singapore ..............................6.5
2.03 Extent of staff training.............................................................2 .....n.................5.5 Sweden .................................5.7
2.04 Local availability of specialized research
and training services ...............................................................1 .....n.................6.5 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ............................1 .....n.................5.7 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................31 .....n ...............47.0 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ........................................8 .....n.................6.5 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition .......12 .....n.................4.8 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................28 .....n .................7.4 China..................................–24.6
2.10 Time to pay taxes....................................................................3 .....n...............63.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure ...............................................1 .....n.................6.8 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .........................................7 .....n.................6.8 Norway...................................7.0
2.13 Internet users .........................................................................6 .....n ...............77.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ..............................................4 .....n...............34.2 Sweden................................41.2
2.15 Telephone lines........................................................................1 .....n...............64.1 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................39 .....n...............89.1 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business....................................................15 .....n.................2.0 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Switzerland
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ....................................................5 .....n.................0.4 Saudi Arabia...........................0.0
2.19 Cost of closing a business ......................................................5 .....n.................4.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................32 .....n...............20.0 Australia.................................2.0
2.21 Time to register property ......................................................16 .....n ...............16.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................36 .....n.................3.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................41 .....n ...............–0.4 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................12 .....n .................7.0 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies).............................................................2 .....n .............131.9 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator....................................................6 .....n .................7.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................32 .....n.................4.7 Ireland....................................6.8
3.10 Financial Stress Index............................................................16 .....n.................3.9 Thailand ...............................–0.2
3.11 Tier 1 capital ratio....................................................................2 .....n ...............15.4 Jordan..................................16.8
256 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................19 .....n.................5.4 Panama..................................6.0
3.16 Manageability of public debt ................................................23 .....n...............40.3 Chile ......................................6.1
3.17 Credit default swap spreads..................................................10 .....n ...............51.5 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .......................................6 .....n.............184.6 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................27 .....n .................1.2 Egypt ...................................23.8
4.03 Financial system deposits to GDP ..........................................3 .....n..............157.7 Hong Kong SAR ................285.2
4.04 M2 to GDP ..............................................................................5 .....n .............154.6 Hong Kong SAR ................329.5
4.05 Private credit to GDP...............................................................7 .....n .............174.8 United States.....................210.7
4.06 Bank deposits to GDP .............................................................6 .....n .............133.2 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................22 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................20 .....n.................4.6 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................43 .....n.................3.7 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................26 .....n.................4.8 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................27 .....n .................1.8 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................35 .....n...............22.5 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................33 .....n.................0.4 China ...................................22.0
5.02 IPO proceeds amount ...........................................................40 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................29 .....n.................0.4 China....................................12.6
 Switzerland

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................14 .....n .................1.6 United States ......................36.0
5.05 M&A transaction value to GDP ...............................................6 .....n................11.3 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................19 .....n .................1.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................13 .....n.................5.3 Ireland..................................15.6
5.08 Non–life insurance density .....................................................3 .....n.................4.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................32 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................31 .....n.................0.4 India.....................................55.4
5.11 Non–life insurance coverage .................................................35 .....n.................0.3 China....................................14.6
5.12 Relative value-added of insurance to GDP ..............................4 .....n.................3.4 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................36 .....n .................1.0 United States.......................10.8
5.14 Share of total number of securitization deals .......................35 .....n.................0.2 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ..............................................3 .....n.................8.5 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ...........................6 .....n.................4.0 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ............................................4 .....n.................5.3 United Kingdom ..................40.8

Derivatives markets
257
6.04 Interest rate derivatives turnover: Forward rate
agreements .............................................................................6 .....n .................1.8 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps................................5 .....n.................3.5 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................26 .....n.................0.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......24 .....n.................0.2 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options .....................3 .....n.................4.7 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio .....................................................6 .....n..............187.7 Italy....................................348.2
6.10 Stock market capitalization to GDP .........................................2 .....n.............320.4 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP..........................................1 .....n .............541.2 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ...................15 .....n.................0.3 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............16 .....n...............29.1 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............31 .....n...............23.7 Japan .................................184.6
6.15 Private international bonds to GDP .........................................5 .....n...............85.9 Ireland................................215.3
6.16 Public international bonds to GDP ........................................47 .....n.................0.2 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ....................4 .....n.................3.1 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication ...............................................1 .....n.................6.6 Switzerland ............................6.6
7.02 Venture capital availability......................................................16 .....n.................3.5 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................28 .....n.................3.1 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................15 .....n.................4.4 Hong Kong SAR ....................5.2
7.05 Ease of access to loans.........................................................15 .....n.................3.7 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................33 .....n.................3.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................51 .....n.................0.0 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................15 .....n...............93.1 Canada...............................218.5
7.10 Total number of point of sale (POS) devices .........................14 .....n..........1,985.3 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Thailand
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................67.0 19.9% 20.1% US$ bn
GDP (US$ billions), 2009 .........................................................263.9
n Public debt securities .......103.6
GDP (current prices) per capita, 2009 ..............................3,939.6 n Private debt securities........63.1
GDP (PPP) as share (%) of world total, 2009 ........................0.77 12.3% n Banking deposits ...............245.4
Compound annual growth rate of real GDP (%), 2005–09 ..2.01 n Equity securities ................102.6

Total 514.7
47.7%
Total/GDP 188.9%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................34 3.4

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................31 4.3

Financial sector liberalization ....................................................29 4.6
Corporate governance.................................................................34 4.3
Legal and regulatory issues .......................................................41 3.4
Contract enforcement..................................................................22 5.0
2nd pillar: Business environment .............................................37 4.3
Human capital ...............................................................................34 4.2
258
Taxes...............................................................................................32 4.6
Infrastructure ................................................................................38 3.6
Cost of doing business ................................................................38 4.8
3rd pillar: Financial stability......................................................25 4.7
Currency stability............................................................................8 5.5
Banking system stability..............................................................40 4.0
Risk of sovereign debt crisis ......................................................32 4.9
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................33 3.5

Size index .......................................................................................22 3.1
Efficiency index.............................................................................34 4.7
Financial information disclosure................................................37 2.0
5th pillar: Non-banking financial services .............................49 1.6
IPO activity.....................................................................................38 1.6
M&A activity..................................................................................42 1.5
Insurance .......................................................................................39 2.3
Securitization.................................................................................54 1.1
6th pillar: Financial markets......................................................32 2.1
Foreign exchange markets .........................................................30 1.1
Derivatives markets .....................................................................28 1.5
Equity market development ........................................................42 1.8
Bond market development..........................................................19 3.3
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................36 3.1

Commercial access......................................................................23 3.7
Retail access.................................................................................32 2.5
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Thailand

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................42 .....n ...............–0.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......28 .....n...............49.1 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................25 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................34 .....n.................4.2 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................38 .....n.................4.5 Sweden .................................5.9
1.06 Reliance on professional management .................................35 .....n.................4.5 Sweden .................................6.5
1.07 Willingness to delegate.........................................................44 .....n.................3.5 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................26 .....n.................5.1 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................37 .....n.................3.8 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................26 .....n.................4.6 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................16 .....n.................3.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................44 .....n.................2.7 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................23 .....n.................4.8 South Africa...........................6.0
1.14 Property rights.......................................................................46 .....n.................3.9 Switzerland ............................6.4
1.15 Intellectual property protection .............................................42 .....n.................3.1 Sweden .................................6.2
1.16 Diversion of public funds.......................................................33 .....n.................3.3 Sweden .................................6.5
1.17 Public trust of politicians .......................................................37 .....n.................2.5 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................41 .....n.................3.4 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................25 .....n.................8.0 Sweden ...............................15.0 259
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................34 .....n.................3.4 Singapore ..............................6.5
1.22 Judicial independence ...........................................................30 .....n.................4.3 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................33 .....n.................4.4 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................25 .....n.............479.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................30 .....n...............35.0 Ireland..................................20.0
1.26 Strength of investor protection index ....................................11 .....n .................7.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................6 .....n ...............12.3 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................35 .....n.................4.4 Switzerland ............................6.1
2.02 Quality of math and science education.................................34 .....n.................4.3 Singapore ..............................6.5
2.03 Extent of staff training...........................................................36 .....n.................4.1 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................45 .....n.................4.1 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................26 .....n.................4.1 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................30 .....n...............48.3 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................43 .....n.................4.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......36 .....n.................4.0 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................33 .....n.............264.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................29 .....n.................4.9 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................32 .....n.................6.3 Norway...................................7.0
2.13 Internet users .......................................................................45 .....n...............23.9 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................48 .....n .................1.4 Sweden................................41.2
2.15 Telephone lines......................................................................48 .....n ...............10.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................17 .....n .............121.1 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................30 .....n.................6.3 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Thailand
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................12 .....n .................1.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................54 .....n...............36.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................45 .....n...............32.0 Australia.................................2.0
2.21 Time to register property ........................................................1 .....n.................2.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................32 .....n.................2.7 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................16 .....n.................2.5 Venezuela ............................14.5
3.02 External vulnerability indicator ...............................................11 .....n ...............31.9 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP ...........................................17 .....n.................4.9 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................25 .....n.................2.5 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies)......................11 .....n...............25.7 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................46 .....n.................2.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................41 .....n.................3.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................20 .....n.................5.3 Ireland....................................6.8
3.10 Financial Stress Index .............................................................1 .....n ...............–0.2 Thailand ...............................–0.2
3.11 Tier 1 capital ratio ..................................................................18 .....n................11.3 Jordan..................................16.8
260 3.12 Output loss during banking crises.........................................56 .....n.............182.6 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................34 .....n ...............14.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................32 .....n ...............12.7 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................23 .....n.................5.3 Panama..................................6.0
3.16 Manageability of public debt ................................................29 .....n...............46.3 Chile ......................................6.1
3.17 Credit default swap spreads .................................................28 .....n .............132.1 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................23 .....n...............88.4 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................15 .....n.................2.8 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................18 .....n...............84.5 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................14 .....n ..............117.3 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................29 .....n ...............77.9 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................19 .....n...............84.1 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................56 .....n.................2.3 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................18 .....n .................1.9 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................27 .....n.................5.6 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................34 .....n.................2.4 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................30 .....n...............32.9 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................41 .....n.................0.2 China ...................................22.0
5.02 IPO proceeds amount ...........................................................37 .....n.................0.1 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................20 .....n .................1.3 China....................................12.6
 Thailand

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................40 .....n.................0.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................45 .....n.................2.1 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................26 .....n.................0.7 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................27 .....n.................2.4 Ireland..................................15.6
5.08 Non–life insurance density ...................................................37 .....n .................1.6 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................27 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage.........................................................13 .....n .................1.6 India.....................................55.4
5.11 Non–life insurance coverage .................................................18 .....n .................1.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................50 .....n.................0.5 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................53 .....n.................0.1 United States.......................10.8
5.14 Share of total number of securitization deals .......................42 .....n.................0.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................36 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................27 .....n.................0.2 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................29 .....n.................0.2 United Kingdom ..................40.8

Derivatives markets
261
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................27 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................26 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................19 .....n.................0.2 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......23 .....n.................0.3 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................35 .....n.................0.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................38 .....n...............42.3 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................32 .....n...............73.3 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................29 .....n...............39.7 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................26 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............21 .....n ...............19.3 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............15 .....n...............42.6 Japan .................................184.6
6.15 Private international bonds to GDP .......................................39 .....n.................3.3 Ireland................................215.3
6.16 Public international bonds to GDP ........................................45 .....n.................0.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ....................1 .....n.................3.7 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................29 .....n.................5.1 Switzerland ............................6.6
7.02 Venture capital availability......................................................31 .....n.................2.9 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................18 .....n.................3.5 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................18 .....n.................4.3 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................20 .....n.................3.4 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................29 .....n.................3.8 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts....................................17 .....n ......144,883.8 Japan............................717,241.6
7.08 Commercial bank branches ...................................................37 .....n................11.0 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................18 .....n ...............71.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................28 .....n.................0.1 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Turkey
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................70.5 16.7% US$ bn
GDP (US$ billions), 2009 .........................................................615.3
n Public debt securities .......292.2
GDP (current prices) per capita, 2009 ..............................8,723.4 41.5% n Private debt securities........10.8
GDP (PPP) as share (%) of world total, 2009 ........................1.25 n Banking deposits ...............283.7
Compound annual growth rate of real GDP (%), 2005–09 ..1.42 n Equity securities ................117.9

40.3% Total 704.6

1.5%
Total/GDP 96.5%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................42 3.2

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................39 3.8

Financial sector liberalization ....................................................37 3.7
Corporate governance.................................................................51 3.8
Legal and regulatory issues .......................................................42 3.3
Contract enforcement..................................................................28 4.5
2nd pillar: Business environment .............................................29 4.6
Human capital ...............................................................................47 3.6
262
Taxes...............................................................................................22 5.0
Infrastructure ................................................................................27 4.5
Cost of doing business ................................................................23 5.4
3rd pillar: Financial stability......................................................51 3.7
Currency stability..........................................................................48 2.6
Banking system stability..............................................................22 4.9
Risk of sovereign debt crisis ......................................................50 3.2
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................40 3.1

Size index .......................................................................................45 1.5
Efficiency index.............................................................................36 4.7
Financial information disclosure................................................25 3.1
5th pillar: Non-banking financial services .............................41 1.9
IPO activity.....................................................................................31 1.8
M&A activity..................................................................................40 1.5
Insurance .......................................................................................49 1.8
Securitization.................................................................................27 2.4
6th pillar: Financial markets......................................................39 1.9
Foreign exchange markets .........................................................34 1.1
Derivatives markets .....................................................................23 2.2
Equity market development ........................................................41 1.8
Bond market development..........................................................26 2.2
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................31 3.3

Commercial access......................................................................40 3.3
Retail access.................................................................................18 3.3
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Turkey

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................44 .....n.................0.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......20 .....n...............83.5 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................46 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................56 .....n.................3.2 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................49 .....n.................4.2 Sweden .................................5.9
1.06 Reliance on professional management .................................45 .....n.................4.1 Sweden .................................6.5
1.07 Willingness to delegate.........................................................56 .....n.................2.8 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................44 .....n.................4.4 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................39 .....n.................3.7 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................48 .....n.................3.9 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................28 .....n.................3.1 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................50 .....n.................2.3 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................29 .....n.................4.6 South Africa...........................6.0
1.14 Property rights.......................................................................43 .....n.................4.0 Switzerland ............................6.4
1.15 Intellectual property protection .............................................52 .....n.................2.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................37 .....n.................3.2 Sweden .................................6.5
1.17 Public trust of politicians .......................................................35 .....n.................2.5 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................32 .....n.................4.4 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................18 .....n.................9.5 Sweden ...............................15.0 263
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................27 .....n.................4.0 Singapore ..............................6.5
1.22 Judicial independence ...........................................................46 .....n.................3.4 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................40 .....n.................3.6 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................22 .....n.............420.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................30 .....n...............35.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................27 .....n.................5.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts ...................................................18 .....n...............18.8 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................52 .....n.................3.6 Switzerland ............................6.1
2.02 Quality of math and science education.................................44 .....n.................3.4 Singapore ..............................6.5
2.03 Extent of staff training...........................................................43 .....n.................3.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................39 .....n.................4.2 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................50 .....n.................3.4 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................36 .....n...............36.3 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................27 .....n.................5.3 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......42 .....n.................3.9 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................19 .....n ...............–3.1 China..................................–24.6
2.10 Time to pay taxes..................................................................28 .....n.............223.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................27 .....n.................5.1 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................28 .....n.................6.4 Norway...................................7.0
2.13 Internet users .......................................................................32 .....n...............34.4 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................32 .....n .................7.8 Sweden................................41.2
2.15 Telephone lines......................................................................32 .....n...............23.7 Switzerland ..........................64.1
2.16 Mobile telephone subscribers.................................................1 .....n.............208.7 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................43 .....n ...............14.2 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Turkey
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................26 .....n.................3.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................31 .....n ...............15.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................7 .....n.................6.0 Australia.................................2.0
2.21 Time to register property ........................................................8 .....n.................6.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................40 .....n.................3.3 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................39 .....n.................0.0 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................32 .....n .............154.5 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................48 .....n ...............–4.6 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................41 .....n...............85.9 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................23 .....n...............45.1 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................46 .....n.................2.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ...........................15 .....n.................5.7 Ireland....................................6.8
3.10 Financial Stress Index .............................................................2 .....n ...............–0.1 Thailand ...............................–0.2
3.11 Tier 1 capital ratio....................................................................7 .....n ...............12.9 Jordan..................................16.8
264 3.12 Output loss during banking crises.........................................44 .....n ...............81.8 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................47 .....n ...............10.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................46 .....n.................9.3 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................54 .....n.................3.0 Panama..................................6.0
3.16 Manageability of public debt ................................................28 .....n...............46.3 Chile ......................................6.1
3.17 Credit default swap spreads .................................................39 .....n.............186.4 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................42 .....n...............48.5 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................19 .....n .................1.8 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................42 .....n...............39.9 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................54 .....n...............32.9 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................45 .....n...............30.8 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................44 .....n...............39.8 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator.............................................16 .....n.................4.7 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................44 .....n.................3.9 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................43 .....n...............26.3 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................40 .....n.................2.8 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................30 .....n.................5.7 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................25 .....n...............42.9 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................12 .....n ...............15.9 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share...................................................................17 .....n .................1.1 China ...................................22.0
5.02 IPO proceeds amount ...........................................................28 .....n.................0.3 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................33 .....n.................0.3 China....................................12.6
 Turkey

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................26 .....n.................0.4 United States ......................36.0
5.05 M&A transaction value to GDP .............................................44 .....n.................2.2 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................39 .....n.................0.3 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................50 .....n.................0.2 Ireland..................................15.6
5.08 Non–life insurance density ...................................................45 .....n .................1.1 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................39 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................43 .....n.................0.1 India.....................................55.4
5.11 Non–life insurance coverage .................................................22 .....n.................0.8 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................27 .....n .................1.1 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................21 .....n .................1.8 United States.......................10.8
5.14 Share of total number of securitization deals .......................24 .....n.................0.4 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ............................................41 .....n.................0.1 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover .........................28 .....n.................0.2 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ..........................................32 .....n.................0.1 United Kingdom ..................40.8

Derivatives markets
265
6.04 Interest rate derivatives turnover: Forward rate
agreements ...........................................................................29 .....n.................0.0 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps..............................34 .....n.................0.0 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options............................24 .....n.................0.0 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ......11 .....n .................1.5 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ...................23 .....n.................0.1 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................21 .....n...............79.2 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................44 .....n ...............37.9 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................25 .....n...............49.7 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................33 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............38 .....n.................0.1 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............19 .....n...............36.5 Japan .................................184.6
6.15 Private international bonds to GDP .......................................46 .....n .................1.9 Ireland................................215.3
6.16 Public international bonds to GDP.........................................16 .....n .................7.4 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................31 .....n.................5.0 Switzerland ............................6.6
7.02 Venture capital availability......................................................51 .....n.................2.2 Hong Kong SAR ....................4.4
7.03 Ease of access to credit ........................................................14 .....n.................3.6 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................32 .....n.................3.9 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................43 .....n.................2.6 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................38 .....n.................3.0 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................15 .....n ......166,120.7 Japan............................717,241.6
7.08 Commercial bank branches ...................................................25 .....n................17.8 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................32 .....n...............44.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices...........................4 .....n..........3,232.8 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................29 .....n.................0.0 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Ukraine
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................45.7 19.2% US$ bn
25.2%
GDP (US$ billions), 2009 .........................................................116.2
n Public debt securities .........18.6
GDP (current prices) per capita, 2009 ..............................2,542.1 7.4% n Private debt securities..........7.1
GDP (PPP) as share (%) of world total, 2009 ........................0.42 n Banking deposits .................46.6
Compound annual growth rate of real GDP (%), 2005–09 ..0.07 n Equity securities ..................24.4

Total 96.7
48.2%
Total/GDP 53.6%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................53 2.8

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................55 2.8

Financial sector liberalization ....................................................53 1.7
Corporate governance.................................................................56 3.5
Legal and regulatory issues .......................................................54 2.8
Contract enforcement..................................................................49 3.3
2nd pillar: Business environment .............................................44 3.9
Human capital ...............................................................................31 4.3
266
Taxes...............................................................................................50 3.8
Infrastructure ................................................................................39 3.6
Cost of doing business ................................................................47 4.1
3rd pillar: Financial stability......................................................55 3.1
Currency stability..........................................................................49 2.5
Banking system stability..............................................................32 4.3
Risk of sovereign debt crisis ......................................................56 2.2
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................50 2.6

Size index .....................................................................................n/a n/a
Efficiency index.............................................................................52 3.4
Financial information disclosure................................................53 1.1
5th pillar: Non-banking financial services .............................24 2.5
IPO activity.....................................................................................22 2.2
M&A activity..................................................................................34 1.7
Insurance .......................................................................................35 2.5
Securitization.................................................................................12 3.5
6th pillar: Financial markets......................................................48 1.6
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................46 1.6
Bond market development..........................................................41 1.6
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................48 2.8

Commercial access......................................................................53 2.8
Retail access.................................................................................29 2.8
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Ukraine

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................49 .....n ...............–1.1 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services ......n/a .........................n/a Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................54 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................44 .....n.................4.0 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................45 .....n.................4.3 Sweden .................................5.9
1.06 Reliance on professional management .................................57 .....n.................3.5 Sweden .................................6.5
1.07 Willingness to delegate.........................................................55 .....n.................3.0 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................56 .....n.................3.5 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................57 .....n.................3.0 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................57 .....n.................2.8 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................51 .....n.................2.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................34 .....n.................3.0 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................57 .....n.................2.7 South Africa...........................6.0
1.14 Property rights.......................................................................56 .....n.................2.6 Switzerland ............................6.4
1.15 Intellectual property protection .............................................51 .....n.................2.6 Sweden .................................6.2
1.16 Diversion of public funds.......................................................54 .....n.................2.2 Sweden .................................6.5
1.17 Public trust of politicians .......................................................50 .....n .................1.9 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................55 .....n.................2.2 Denmark................................9.3
1.19 Strength of legal rights index ..................................................4 .....n.................9.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................40 .....n.................4.0 Sweden ...............................15.0 267
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................55 .....n.................2.0 Singapore ..............................6.5
1.22 Judicial independence ...........................................................56 .....n.................2.0 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................57 .....n .................1.9 Sweden .................................6.8
1.24 Time to enforce a contract ......................................................9 .....n.............345.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract ........................11 .....n...............30.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................44 .....n.................4.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................52 .....n ...............41.5 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................54 .....n.................3.5 Switzerland ............................6.1
2.02 Quality of math and science education.................................24 .....n.................4.6 Singapore ..............................6.5
2.03 Extent of staff training...........................................................53 .....n.................3.4 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................51 .....n.................3.9 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................51 .....n.................3.3 Switzerland ............................5.7
2.06 Tertiary enrollment ..................................................................5 .....n...............79.4 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................52 .....n.................3.2 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......55 .....n.................2.9 Singapore ..............................5.8
2.09 Marginal tax variation ..............................................................4 .....n .............–18.1 China..................................–24.6
2.10 Time to pay taxes..................................................................53 .....n.............736.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................37 .....n.................4.1 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................48 .....n.................5.5 Norway...................................7.0
2.13 Internet users .......................................................................51 .....n ...............10.6 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................43 .....n.................3.5 Sweden................................41.2
2.15 Telephone lines......................................................................27 .....n...............28.7 Switzerland ..........................64.1
2.16 Mobile telephone subscribers ...............................................13 .....n .............126.3 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................26 .....n.................5.8 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Ukraine
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................22 .....n.................2.6 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................57 .....n...............42.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................38 .....n ...............27.0 Australia.................................2.0
2.21 Time to register property ......................................................52 .....n...............93.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................35 .....n.................2.9 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................21 .....n .................1.9 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................31 .....n .............138.8 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................44 .....n ...............–4.1 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................39 .....n...............56.8 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................32 .....n...............88.6 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................55 .....n.................3.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................53 .....n .................1.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................28 .....n.................4.8 Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio....................................................................3 .....n ...............14.4 Jordan..................................16.8
268 3.12 Output loss during banking crises.........................................25 .....n ...............10.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................53 .....n .................7.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................54 .....n.................6.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................57 .....n .................1.7 Panama..................................6.0
3.16 Manageability of public debt ..................................................8 .....n...............20.2 Chile ......................................6.1
3.17 Credit default swap spreads .................................................49 .....n.............628.7 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP ....................................n/a .........................n/a Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP .......................................n/a .........................n/a Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................40 .....n...............53.8 Hong Kong SAR ................329.5
4.05 Private credit to GDP ............................................................n/a .........................n/a United States.....................210.7
4.06 Bank deposits to GDP ...........................................................51 .....n...............25.9 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................47 .....n.................3.2 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................42 .....n.................3.7 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................36 .....n................11.9 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................51 .....n.................4.0 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................41 .....n...............33.8 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................47 .....n.................3.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................32 .....n.................0.5 China ...................................22.0
5.02 IPO proceeds amount ...........................................................12 .....n.................0.5 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................29 .....n.................0.4 China....................................12.6
 Ukraine

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................42 .....n.................0.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................33 .....n.................3.6 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................25 .....n.................0.7 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................52 .....n.................0.1 Ireland..................................15.6
5.08 Non–life insurance density ...................................................23 .....n.................2.2 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ..........................n/a .........................n/a China .....................................0.3
5.10 Life insurance coverage ........................................................50 .....n.................0.0 India.....................................55.4
5.11 Non–life insurance coverage .................................................19 .....n .................1.0 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................10 .....n.................2.2 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................16 .....n.................2.3 United States.......................10.8
5.14 Share of total number of securitization deals........................14 .....n .................1.1 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
269
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................50 .....n .................1.2 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................27 .....n ...............97.7 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................42 .....n .................1.9 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................28 .....n.................0.1 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................31 .....n.................6.1 Ireland................................215.3
6.16 Public international bonds to GDP ........................................21 .....n.................6.0 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................39 .....n.................0.0 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................57 .....n.................3.1 Switzerland ............................6.6
7.02 Venture capital availability......................................................56 .....n .................1.9 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................54 .....n .................1.9 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................56 .....n.................2.3 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................56 .....n .................1.9 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP .........................................10 .....n.................9.2 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts .....................................3 .....n ......314,532.3 Japan............................717,241.6
7.08 Commercial bank branches ...................................................49 .....n.................2.7 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................17 .....n ...............71.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices.........................28 .....n..............187.2 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................22 .....n.................0.6 Bangladesh ..........................41.2
 2: Country/Economy Profiles

United Arab Emirates

Key indicators Financial assets by major type, 2008
Population (millions), 2009 .........................................................4.9 22.0% 23.1% US$ bn
GDP (US$ billions), 2009 .........................................................230.0
n Public debt securities .......103.0
GDP (current prices) per capita, 2009 ............................46,856.8 n Private debt securities........71.4
GDP (PPP) as share (%) of world total, 2009 ........................0.27 n Banking deposits ...............173.5
Compound annual growth rate of real GDP (%), 2005–09 ..3.79 16.0% n Equity securities ..................97.9

38.9%
Total 445.7

Total/GDP 170.6%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................21 4.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................23 4.8

Financial sector liberalization ....................................................27 5.6
Corporate governance.................................................................20 5.0
Legal and regulatory issues .......................................................20 4.4
Contract enforcement..................................................................36 4.1
2nd pillar: Business environment .............................................21 5.1
Human capital ...............................................................................22 4.6
270
Taxes.................................................................................................3 6.3
Infrastructure ................................................................................25 4.8
Cost of doing business ................................................................39 4.7
3rd pillar: Financial stability........................................................6 5.5
Currency stability........................................................................n/a n/a
Banking system stability................................................................4 5.8
Risk of sovereign debt crisis ......................................................29 5.1
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................20 4.2

Size index .....................................................................................n/a n/a
Efficiency index.............................................................................24 5.4
Financial information disclosure................................................41 1.7
5th pillar: Non-banking financial services .............................28 2.3
IPO activity.....................................................................................15 3.1
M&A activity..................................................................................44 1.3
Insurance .......................................................................................36 2.5
Securitization.................................................................................29 2.3
6th pillar: Financial markets......................................................28 2.3
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................29 2.3
Bond market development ........................................................n/a n/a
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................15 4.1

Commercial access......................................................................10 4.1
Retail access.................................................................................12 4.1
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 United Arab Emirates

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......27 .....n...............38.6 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................32 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................20 .....n.................4.5 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................25 .....n.................4.8 Sweden .................................5.9
1.06 Reliance on professional management .................................23 .....n.................5.0 Sweden .................................6.5
1.07 Willingness to delegate .........................................................17 .....n.................4.6 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................23 .....n.................5.4 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................18 .....n.................5.4 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................14 .....n.................5.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation ...........................................4 .....n.................4.3 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................18 .....n.................3.7 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................18 .....n.................5.1 South Africa...........................6.0
1.14 Property rights.......................................................................26 .....n.................5.0 Switzerland ............................6.4
1.15 Intellectual property protection .............................................16 .....n.................5.3 Sweden .................................6.2
1.16 Diversion of public funds.......................................................18 .....n.................5.2 Sweden .................................6.5
1.17 Public trust of politicians .........................................................4 .....n.................5.6 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................20 .....n.................6.5 Denmark................................9.3
1.19 Strength of legal rights index ................................................40 .....n.................4.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................46 .....n.................2.0 Sweden ...............................15.0 271
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................13 .....n.................4.6 Singapore ..............................6.5
1.22 Judicial independence ...........................................................23 .....n.................4.9 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................19 .....n.................5.8 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................34 .....n .............537.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................56 .....n...............49.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................49 .....n.................4.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................34 .....n...............26.2 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................21 .....n.................5.0 Switzerland ............................6.1
2.02 Quality of math and science education.................................14 .....n.................4.9 Singapore ..............................6.5
2.03 Extent of staff training...........................................................22 .....n.................4.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................20 .....n.................5.1 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ............................2 .....n.................5.7 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................48 .....n...............22.9 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection.......................................10 .....n.................6.4 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.........6 .....n.................5.4 Singapore ..............................5.8
2.09 Marginal tax variation ..............................................................9 .....n .............–14.1 China..................................–24.6
2.10 Time to pay taxes....................................................................1 .....n ...............12.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................10 .....n.................6.2 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................21 .....n.................6.5 Norway...................................7.0
2.13 Internet users .......................................................................20 .....n...............65.2 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................27 .....n ...............12.4 Sweden................................41.2
2.15 Telephone lines......................................................................23 .....n...............33.6 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................41 .....n...............86.8 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................29 .....n.................6.2 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

United Arab Emirates

Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................17 .....n.................2.0 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................53 .....n...............30.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................27 .....n ...............15.0 Australia.................................2.0
2.21 Time to register property ........................................................1 .....n.................2.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................53 .....n.................5.1 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) ....................n/a .........................n/a Venezuela ............................14.5
3.02 External vulnerability indicator...............................................34 .....n .............257.7 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................16 .....n.................4.9 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator .......................................n/a .........................n/a Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................29 .....n ...............61.8 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises....................................................1 .....n.................0.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................32 .....n.................4.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ...........................17 .....n.................5.6 Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio....................................................................6 .....n ...............13.4 Jordan..................................16.8
272 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating............................................n/a .........................n/a Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ........................................n/a .........................n/a Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................15 .....n.................5.5 Panama..................................6.0
3.16 Manageability of public debt ................................................34 .....n...............49.8 Chile ......................................6.1
3.17 Credit default swap spreads .................................................46 .....n.............298.6 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP ....................................n/a .........................n/a Denmark ............................219.5
4.02 Central bank assets to GDP .................................................n/a .........................n/a Egypt ...................................23.8
4.03 Financial system deposits to GDP .......................................n/a .........................n/a Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................21 .....n ...............87.7 Hong Kong SAR ................329.5
4.05 Private credit to GDP ............................................................n/a .........................n/a United States.....................210.7
4.06 Bank deposits to GDP ...........................................................28 .....n...............66.4 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................17 .....n.................0.5 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ..............................................3 .....n.................6.3 Netherlands ...........................6.5
4.09 Bank overhead costs ...............................................................7 .....n .................1.3 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................53 .....n...............58.2 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................16 .....n .................1.2 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................23 .....n.................4.6 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................40 .....n ...............12.6 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................14 .....n .................7.3 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................16 .....n .................1.2 China ...................................22.0
5.02 IPO proceeds amount .............................................................5 .....n.................0.8 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................37 .....n.................0.3 China....................................12.6
 United Arab Emirates

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................41 .....n.................0.2 United States ......................36.0
5.05 M&A transaction value to GDP .............................................42 .....n.................2.3 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................44 .....n.................0.2 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................48 .....n.................0.3 Ireland..................................15.6
5.08 Non–life insurance density ...................................................31 .....n .................1.9 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums .............................7 .....n.................0.1 China .....................................0.3
5.10 Life insurance coverage ........................................................53 .....n.................0.0 India.....................................55.4
5.11 Non–life insurance coverage .................................................53 .....n.................0.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................23 .....n .................1.3 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................20 .....n .................1.8 United States.......................10.8
5.14 Share of total number of securitization deals .......................30 .....n.................0.2 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
273
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................29 .....n...............53.8 Italy....................................348.2
6.10 Stock market capitalization to GDP ......................................n/a .........................n/a Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................18 .....n.................0.2 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................21 .....n...............28.4 Ireland................................215.3
6.16 Public international bonds to GDP ........................................31 .....n.................2.5 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................27 .....n.................5.2 Switzerland ............................6.6
7.02 Venture capital availability......................................................12 .....n.................3.7 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................26 .....n.................3.2 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................17 .....n.................4.3 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ..........................................................6 .....n.................4.3 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP .........................................15 .....n.................6.0 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................13 .....n ......175,064.5 Japan............................717,241.6
7.08 Commercial bank branches ...................................................19 .....n...............20.9 Ireland ..................................57.3
7.09 Total number of ATMs ...........................................................12 .....n...............99.3 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

United Kingdom
Key indicators Financial assets by major type, 2008
13.5%
Population (millions), 2009 .......................................................61.8 17.9% US$ bn
GDP (US$ billions), 2009 ......................................................2,183.6
n Public debt securities ....1,396.7
GDP (current prices) per capita, 2009 ............................35,334.3 n Private debt securities...3,484.0
GDP (PPP) as share (%) of world total, 2009 ........................3.10 n Banking deposits ............3,630.9
Compound annual growth rate of real GDP (%), 2005–09 ..0.17 33.6% n Equity securities .............1,852.0
35.0% Total 10,363.5

Total/GDP 386.1%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index........................................................2 5.1

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment ...........................................6 5.8

Financial sector liberalization ......................................................1 7.0
Corporate governance.................................................................10 5.4
Legal and regulatory issues .......................................................13 4.9
Contract enforcement....................................................................4 5.9
2nd pillar: Business environment .............................................15 5.4
Human capital ...............................................................................13 5.1
274
Taxes...............................................................................................29 4.8
Infrastructure ..................................................................................9 5.8
Cost of doing business ..................................................................8 6.2
3rd pillar: Financial stability......................................................46 4.0
Currency stability..........................................................................45 3.2
Banking system stability..............................................................54 3.3
Risk of sovereign debt crisis ......................................................20 5.6
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services........................................1 5.4

Size index .........................................................................................1 6.0
Efficiency index.............................................................................26 5.3
Financial information disclosure..................................................3 4.0
5th pillar: Non-banking financial services ...............................2 5.5
IPO activity.......................................................................................5 4.1
M&A activity....................................................................................1 6.9
Insurance .........................................................................................3 4.5
Securitization...................................................................................2 6.5
6th pillar: Financial markets........................................................4 5.0
Foreign exchange markets ...........................................................1 7.0
Derivatives markets .......................................................................1 7.0
Equity market development ........................................................18 3.5
Bond market development..........................................................11 3.9
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................10 4.3

Commercial access......................................................................29 3.6
Retail access...................................................................................8 5.0
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 United Kingdom

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.5 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.........1 .....n...............73.9 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ................................7 .....n.................5.0 Canada...................................5.2
1.05 Efficacy of corporate boards..................................................12 .....n.................5.2 Sweden .................................5.9
1.06 Reliance on professional management ...................................6 .....n.................6.0 Sweden .................................6.5
1.07 Willingness to delegate .........................................................13 .....n.................4.8 Sweden .................................6.5
1.08 Strength of auditing and reporting standards........................14 .....n.................5.6 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................12 .....n.................6.0 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................10 .....n.................5.1 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................32 .....n.................3.1 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................46 .....n.................2.5 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................26 .....n.................4.8 South Africa...........................6.0
1.14 Property rights .......................................................................15 .....n.................5.8 Switzerland ............................6.4
1.15 Intellectual property protection .............................................14 .....n.................5.5 Sweden .................................6.2
1.16 Diversion of public funds.........................................................9 .....n.................5.8 Sweden .................................6.5
1.17 Public trust of politicians .......................................................29 .....n.................3.2 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................14 .....n .................7.7 Denmark................................9.3
1.19 Strength of legal rights index ..................................................4 .....n.................9.0 Multiple (3)...........................10.0
1.20 Central bank transparency.......................................................2 .....n ...............12.5 Sweden ...............................15.0 275
Contract enforcement
1.21 Effectiveness of law-making bodies ........................................8 .....n.................5.1 Singapore ..............................6.5
1.22 Judicial independence .............................................................6 .....n.................6.3 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................16 .....n.................6.2 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................18 .....n.............399.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract ........................11 .....n...............30.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................9 .....n.................8.0 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................26 .....n...............23.4 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools .............................................8 .....n.................5.5 Switzerland ............................6.1
2.02 Quality of math and science education.................................33 .....n.................4.4 Singapore ..............................6.5
2.03 Extent of staff training...........................................................21 .....n.................4.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................12 .....n.................5.7 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ............................7 .....n.................4.9 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................22 .....n...............59.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................18 .....n.................6.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......21 .....n.................4.4 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................37 .....n................17.0 China..................................–24.6
2.10 Time to pay taxes ..................................................................11 .....n .............110.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................22 .....n.................5.3 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................23 .....n.................6.5 Norway...................................7.0
2.13 Internet users .........................................................................8 .....n ...............76.2 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................10 .....n...............28.2 Sweden................................41.2
2.15 Telephone lines........................................................................7 .....n...............54.2 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................32 .....n...............96.3 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business .....................................................6 .....n.................0.7 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

United Kingdom
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................31 .....n.................4.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................14 .....n.................6.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................21 .....n ...............13.0 Australia.................................2.0
2.21 Time to register property ........................................................9 .....n.................8.0 Multiple (3) ............................2.0
2.22 Time to close a business ........................................................8 .....n .................1.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................51 .....n ...............–4.5 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................37 .....n ...............–1.8 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies).............................................................9 .....n .............–13.1 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................35 .....n.................2.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................22 .....n.................5.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................41 .....n.................3.1 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................39 .....n ...............15.1 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................26 .....n.................9.8 Jordan..................................16.8
276 3.12 Output loss during banking crises.........................................37 .....n...............48.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................14 .....n ...............19.7 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................39 .....n.................4.6 Panama..................................6.0
3.16 Manageability of public debt ................................................47 .....n...............68.1 Chile ......................................6.1
3.17 Credit default swap spreads..................................................14 .....n ...............74.6 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .......................................5 .....n.............189.6 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................20 .....n .................1.7 Egypt ...................................23.8
4.03 Financial system deposits to GDP ..........................................4 .....n .............151.6 Hong Kong SAR ................285.2
4.04 M2 to GDP ..............................................................................7 .....n .............146.5 Hong Kong SAR ................329.5
4.05 Private credit to GDP...............................................................5 .....n.............189.6 United States.....................210.7
4.06 Bank deposits to GDP .............................................................3 .....n .............153.6 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ........................................4 .....n ...............10.1 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................42 .....n.................3.6 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................14 .....n .................1.4 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................42 .....n...............24.8 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................15 .....n .................1.2 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................17 .....n.................3.3 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage................................................1 .....n .............100.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ....................................................................4 .....n.................4.4 China ...................................22.0
5.02 IPO proceeds amount ...........................................................25 .....n.................0.3 Kazakhstan.............................1.1
5.03 Share of world IPOs ................................................................8 .....n.................5.3 China....................................12.6
 United Kingdom

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ..................................................................2 .....n.................9.3 United States ......................36.0
5.05 M&A transaction value to GDP ...............................................3 .....n ...............12.5 Netherlands .........................14.2
5.06 Share of total number of M&A deals ......................................4 .....n .................7.4 United States ......................23.0
Insurance
5.07 Life insurance density .............................................................3 .....n ...............10.0 Ireland..................................15.6
5.08 Non–life insurance density .....................................................4 .....n.................4.2 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................48 .....n ...............–0.1 China .....................................0.3
5.10 Life insurance coverage ..........................................................5 .....n.................6.2 India.....................................55.4
5.11 Non–life insurance coverage ...................................................8 .....n.................2.6 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................20 .....n .................1.5 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ..............................................................2 .....n.................5.8 United States.......................10.8
5.14 Share of total number of securitization deals .........................5 .....n.................2.7 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ..............................................1 .....n...............26.3 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ...........................1 .....n...............29.2 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ............................................1 .....n...............40.8 United Kingdom ..................40.8

Derivatives markets
277
6.04 Interest rate derivatives turnover: Forward rate
agreements .............................................................................1 .....n...............45.1 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps................................1 .....n...............45.8 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options..............................2 .....n...............34.1 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ........1 .....n...............46.7 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options .....................1 .....n...............42.4 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ..................................................n/a .........................n/a Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................14 .....n .............136.6 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ...................13 .....n.................0.4 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............24 .....n................17.6 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP ...............9 .....n...............46.3 Japan .................................184.6
6.15 Private international bonds to GDP .........................................3 .....n .............134.4 Ireland................................215.3
6.16 Public international bonds to GDP ........................................38 .....n .................1.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................19 .....n .................1.5 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication ...............................................2 .....n.................6.5 Switzerland ............................6.6
7.02 Venture capital availability......................................................25 .....n.................3.0 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................55 .....n .................1.8 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................22 .....n.................4.1 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................42 .....n.................2.7 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................24 .....n.................4.4 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts .....................................4 .....n......292,325.4 Japan............................717,241.6
7.08 Commercial bank branches ...................................................20 .....n...............20.7 Ireland ..................................57.3
7.09 Total number of ATMs.............................................................6 .....n .............122.8 Canada...............................218.5
7.10 Total number of point of sale (POS) devices...........................9 .....n..........2,330.7 Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

United States
Key indicators Financial assets by major type, 2008
10.6%
Population (millions), 2009 .....................................................307.4 23.0% US$ bn
GDP (US$ billions), 2009 ....................................................14,256.3
n Public debt securities ....5,421.3
GDP (current prices) per capita, 2009 ............................46,380.9 n Private debt securities.22,294.9
GDP (PPP) as share (%) of world total, 2009 ......................20.46 n Banking deposits ..........11,613.9
Compound annual growth rate of real GDP (%), 2005–09 ..0.55 n Equity securities ...........11,737.6
22.7% 43.7%
Total 51,067.6

Total/GDP 353.6%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index........................................................1 5.1

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................14 5.6

Financial sector liberalization ....................................................13 7.0
Corporate governance.................................................................17 5.1
Legal and regulatory issues .......................................................16 4.7
Contract enforcement....................................................................9 5.6
2nd pillar: Business environment .............................................17 5.4
Human capital .................................................................................6 5.5
278
Taxes...............................................................................................44 4.0
Infrastructure ................................................................................15 5.4
Cost of doing business ..................................................................4 6.5
3rd pillar: Financial stability......................................................39 4.3
Currency stability..........................................................................41 3.3
Banking system stability..............................................................52 3.4
Risk of sovereign debt crisis ........................................................4 6.4
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................27 4.0

Size index .......................................................................................19 3.4
Efficiency index.............................................................................38 4.6
Financial information disclosure..................................................3 4.0
5th pillar: Non-banking financial services ...............................1 6.1
IPO activity.......................................................................................3 5.4
M&A activity....................................................................................2 6.4
Insurance .........................................................................................1 5.4
Securitization...................................................................................1 7.0
6th pillar: Financial markets........................................................1 5.8
Foreign exchange markets ...........................................................1 7.0
Derivatives markets .......................................................................1 7.0
Equity market development ..........................................................8 5.0
Bond market development............................................................3 5.1
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access..........................................................5 4.7

Commercial access......................................................................24 3.7
Retail access...................................................................................3 5.7
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 United States

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization ...................................................1 .....n.................2.2 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services .......15 .....n ...............51.5 Turkey ..................................83.5
1.03 Domestic financial sector liberalization ...................................1 .....n .................1.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ................................4 .....n.................5.1 Canada...................................5.2
1.05 Efficacy of corporate boards..................................................19 .....n.................5.0 Sweden .................................5.9
1.06 Reliance on professional management .................................13 .....n.................5.6 Sweden .................................6.5
1.07 Willingness to delegate...........................................................8 .....n.................5.1 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................31 .....n.................5.0 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................22 .....n.................5.2 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................23 .....n.................4.8 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................18 .....n.................3.5 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................11 .....n.................4.2 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................35 .....n.................4.3 South Africa...........................6.0
1.14 Property rights.......................................................................24 .....n.................5.1 Switzerland ............................6.4
1.15 Intellectual property protection .............................................20 .....n.................5.1 Sweden .................................6.2
1.16 Diversion of public funds.......................................................22 .....n.................4.7 Sweden .................................6.5
1.17 Public trust of politicians .......................................................28 .....n.................3.3 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................16 .....n .................7.5 Denmark................................9.3
1.19 Strength of legal rights index ................................................12 .....n.................8.0 Multiple (3)...........................10.0
1.20 Central bank transparency.....................................................15 .....n ...............10.0 Sweden ...............................15.0 279
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................25 .....n.................4.0 Singapore ..............................6.5
1.22 Judicial independence ...........................................................21 .....n.................5.0 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................27 .....n.................5.0 Sweden .................................6.8
1.24 Time to enforce a contract ......................................................7 .....n.............300.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................22 .....n...............32.0 Ireland..................................20.0
1.26 Strength of investor protection index......................................4 .....n.................8.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts.....................................................9 .....n ...............14.4 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools .............................................9 .....n.................5.5 Switzerland ............................6.1
2.02 Quality of math and science education.................................30 .....n.................4.4 Singapore ..............................6.5
2.03 Extent of staff training.............................................................9 .....n.................5.1 Sweden .................................5.7
2.04 Local availability of specialized research
and training services..............................................................10 .....n.................5.8 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ............................4 .....n.................5.1 Switzerland ............................5.7
2.06 Tertiary enrollment ..................................................................3 .....n ...............81.7 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................29 .....n.................5.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......46 .....n.................3.8 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................43 .....n...............25.4 China..................................–24.6
2.10 Time to pay taxes..................................................................21 .....n..............187.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................17 .....n.................5.8 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................26 .....n.................6.4 Norway...................................7.0
2.13 Internet users .......................................................................12 .....n ...............74.0 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................17 .....n...............23.5 Sweden................................41.2
2.15 Telephone lines........................................................................9 .....n...............49.6 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................44 .....n...............80.4 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business .....................................................6 .....n.................0.7 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

United States
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ....................................................6 .....n.................0.5 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................15 .....n .................7.0 Multiple (4).............................1.0
2.20 Time to start a business..........................................................7 .....n.................6.0 Australia.................................2.0
2.21 Time to register property.......................................................11 .....n ...............12.0 Multiple (3) ............................2.0
2.22 Time to close a business.......................................................16 .....n .................1.5 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .....................42 .....n ...............–0.7 Venezuela ............................14.5
3.02 External vulnerability indicator..............................................n/a .........................n/a Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................45 .....n ...............–4.3 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) ....................n/a .........................n/a China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)...........................................................12 .....n .............–19.3 Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................52 .....n.................3.0 Multiple (10)...........................0.0
3.08 Financial strengths indicator....................................................6 .....n .................7.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles...........................40 .....n.................3.7 Ireland....................................6.8
3.10 Financial Stress Index ...........................................................38 .....n ...............14.8 Thailand ...............................–0.2
3.11 Tier 1 capital ratio..................................................................29 .....n.................9.3 Jordan..................................16.8
280 3.12 Output loss during banking crises.........................................38 .....n...............50.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating...............................................1 .....n...............20.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator.....................................12 .....n.................5.7 Panama..................................6.0
3.16 Manageability of public debt ................................................36 .....n...............52.9 Chile ......................................6.1
3.17 Credit default swap spreads ...................................................3 .....n ...............37.9 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................33 .....n...............69.1 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................11 .....n.................5.3 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................20 .....n ...............77.9 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................36 .....n...............60.0 Hong Kong SAR ................329.5
4.05 Private credit to GDP...............................................................1 .....n .............210.7 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................22 .....n...............78.3 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................18 .....n.................0.4 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................46 .....n.................3.2 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................39 .....n.................3.5 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................37 .....n ...............13.2 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................35 .....n.................2.4 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................27 .....n.................5.4 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage................................................1 .....n .............100.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ....................................................................2 .....n ...............21.2 China ...................................22.0
5.02 IPO proceeds amount ...........................................................29 .....n.................0.2 Kazakhstan.............................1.1
5.03 Share of world IPOs ................................................................2 .....n................11.4 China....................................12.6
 United States

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ..................................................................1 .....n...............36.0 United States ......................36.0
5.05 M&A transaction value to GDP..............................................11 .....n.................8.7 Netherlands .........................14.2
5.06 Share of total number of M&A deals ......................................1 .....n...............23.0 United States ......................23.0
Insurance
5.07 Life insurance density............................................................17 .....n.................3.5 Ireland..................................15.6
5.08 Non–life insurance density .....................................................2 .....n.................4.5 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................40 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ..........................................................3 .....n ...............10.6 India.....................................55.4
5.11 Non–life insurance coverage ...................................................2 .....n ...............14.0 China....................................14.6
5.12 Relative value-added of insurance to GDP ..............................5 .....n.................3.0 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ..............................................................1 .....n ...............10.8 United States.......................10.8
5.14 Share of total number of securitization deals .........................1 .....n ...............61.7 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover ..............................................2 .....n...............24.4 United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ...........................2 .....n...............26.7 United Kingdom ..................29.2
6.03 Foreign exchange swap turnover ............................................2 .....n ...............10.8 United Kingdom ..................40.8

Derivatives markets
281
6.04 Interest rate derivatives turnover: Forward rate
agreements .............................................................................2 .....n...............26.9 United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps................................2 .....n...............20.5 United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options..............................1 .....n...............42.4 United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps ........2 .....n................17.0 United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options .....................2 .....n...............30.0 United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio .....................................................2 .....n .............271.8 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................12 .....n..............147.8 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP..........................................2 .....n.............383.5 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people ...................19 .....n.................0.2 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ..............2 .....n .............114.6 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP ...............4 .....n ...............61.7 Japan .................................184.6
6.15 Private international bonds to GDP .......................................14 .....n...............45.3 Ireland................................215.3
6.16 Public international bonds to GDP ........................................50 .....n.................0.1 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ....................2 .....n.................3.5 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................14 .....n.................6.0 Switzerland ............................6.6
7.02 Venture capital availability......................................................10 .....n.................3.8 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................37 .....n.................2.7 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................25 .....n.................4.1 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................21 .....n.................3.4 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................43 .....n.................2.2 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts....................................10 .....n......202,189.2 Japan............................717,241.6
7.08 Commercial bank branches .....................................................7 .....n...............36.3 Ireland ..................................57.3
7.09 Total number of ATMs.............................................................2 .....n .............175.7 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate ....................................................................n/a .........................n/a Bangladesh ..........................41.2
 2: Country/Economy Profiles

Venezuela
Key indicators Financial assets by major type, 2008
Population (millions), 2009 .......................................................28.6 US$ bn
GDP (US$ billions), 2009 .........................................................337.3 30.8% n Public debt securities .........45.3
GDP (current prices) per capita, 2009 ............................11,789.0 n Private debt securities........21.2
GDP (PPP) as share (%) of world total, 2009 ........................0.50 n Banking deposits .................80.6
54.8%
Compound annual growth rate of real GDP (%), 2005–09 ..3.79 n Equity securities....................n/a

Total 147.1
14.4%

Total/GDP 46.0%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................56 2.6

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................57 2.3

Financial sector liberalization ....................................................56 1.1
Corporate governance.................................................................55 3.5
Legal and regulatory issues .......................................................57 2.0
Contract enforcement..................................................................56 2.8
2nd pillar: Business environment .............................................55 3.1
Human capital ...............................................................................41 3.9
282
Taxes...............................................................................................56 2.3
Infrastructure ................................................................................51 2.9
Cost of doing business ................................................................53 3.2
3rd pillar: Financial stability......................................................40 4.2
Currency stability............................................................................3 5.9
Banking system stability..............................................................30 4.4
Risk of sovereign debt crisis ......................................................55 2.3
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................54 2.4

Size index .......................................................................................51 1.2
Efficiency index.............................................................................42 4.4
Financial information disclosure................................................56 1.0
5th pillar: Non-banking financial services .............................45 1.7
IPO activity...................................................................................n/a n/a
M&A activity..................................................................................54 1.0
Insurance .......................................................................................38 2.4
Securitization.................................................................................40 1.7
6th pillar: Financial markets......................................................31 2.1
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development.......................................................n/a n/a
Bond market development..........................................................29 2.1
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................57 2.0

Commercial access......................................................................57 2.3
Retail access.................................................................................44 1.7
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Venezuela

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................49 .....n ...............–0.8 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......48 .....n ...............19.9 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................55 .....n.................3.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................55 .....n.................3.2 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................57 .....n.................3.8 Sweden .................................5.9
1.06 Reliance on professional management .................................49 .....n.................3.9 Sweden .................................6.5
1.07 Willingness to delegate.........................................................53 .....n.................3.1 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................50 .....n.................4.0 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................55 .....n.................3.1 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................55 .....n.................3.3 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................56 .....n.................2.1 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................57 .....n .................1.4 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................48 .....n.................3.7 South Africa...........................6.0
1.14 Property rights.......................................................................57 .....n .................1.8 Switzerland ............................6.4
1.15 Intellectual property protection .............................................57 .....n .................1.9 Sweden .................................6.2
1.16 Diversion of public funds.......................................................57 .....n .................1.9 Sweden .................................6.5
1.17 Public trust of politicians .......................................................57 .....n .................1.5 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................57 .....n .................1.9 Denmark................................9.3
1.19 Strength of legal rights index ................................................57 .....n.................2.0 Multiple (3)...........................10.0
1.20 Central bank transparency....................................................n/a .........................n/a Sweden ...............................15.0 283
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................57 .....n .................1.6 Singapore ..............................6.5
1.22 Judicial independence ...........................................................57 .....n .................1.7 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................56 .....n.................2.2 Sweden .................................6.8
1.24 Time to enforce a contract ....................................................29 .....n .............510.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .........................9 .....n...............29.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................57 .....n.................2.3 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................53 .....n...............43.7 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................34 .....n.................4.4 Switzerland ............................6.1
2.02 Quality of math and science education.................................49 .....n.................2.9 Singapore ..............................6.5
2.03 Extent of staff training...........................................................48 .....n.................3.7 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................56 .....n.................3.0 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................57 .....n.................2.5 Switzerland ............................5.7
2.06 Tertiary enrollment ..................................................................6 .....n...............78.1 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................50 .....n.................3.6 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......56 .....n.................2.3 Singapore ..............................5.8
2.09 Marginal tax variation ...........................................................n/a .........................n/a China..................................–24.6
2.10 Time to pay taxes..................................................................54 .....n.............864.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................53 .....n.................3.1 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................57 .....n.................4.3 Norway...................................7.0
2.13 Internet users .......................................................................42 .....n...............25.5 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................39 .....n.................4.7 Sweden................................41.2
2.15 Telephone lines......................................................................34 .....n...............22.4 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................48 .....n...............72.2 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................50 .....n...............24.0 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Venezuela
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................19 .....n.................2.2 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................55 .....n...............38.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................57 .....n .............141.0 Australia.................................2.0
2.21 Time to register property ......................................................40 .....n ...............47.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................43 .....n.................4.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) .......................1 .....n ...............14.5 Venezuela ............................14.5
3.02 External vulnerability indicator...............................................27 .....n .............106.6 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP ...........................................10 .....n .................7.9 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................24 .....n.................0.6 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .......................8 .....n...............22.7 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................20 .....n .................1.3 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................53 .....n .................1.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
284 3.12 Output loss during banking crises.........................................23 .....n .................1.5 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................51 .....n.................8.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................50 .....n.................8.0 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................56 .....n.................2.4 Panama..................................6.0
3.16 Manageability of public debt ..................................................7 .....n................17.4 Chile ......................................6.1
3.17 Credit default swap spreads .................................................52 .....n ...........1402.7 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................51 .....n...............29.6 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................34 .....n.................0.4 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................47 .....n...............30.1 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................55 .....n ...............31.7 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................48 .....n...............26.6 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................49 .....n...............30.7 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator ............................................18 .....n.................4.7 Netherlands ...........................6.5
4.09 Bank overhead costs .............................................................48 .....n.................4.8 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................34 .....n ...............10.8 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................53 .....n.................5.7 Ireland....................................0.6
4.12 Non-performing bank loans to total loans .............................13 .....n.................2.6 Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................49 .....n.................0.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................24 .....n.................0.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share .................................................................n/a .........................n/a China ...................................22.0
5.02 IPO proceeds amount ..........................................................n/a .........................n/a Kazakhstan.............................1.1
5.03 Share of world IPOs .............................................................n/a .........................n/a China....................................12.6
 Venezuela

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................47 .....n.................0.1 United States ......................36.0
5.05 M&A transaction value to GDP .............................................54 .....n.................0.9 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................50 .....n.................0.1 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................51 .....n.................0.1 Ireland..................................15.6
5.08 Non–life insurance density .....................................................8 .....n.................4.0 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ..........................n/a .........................n/a China .....................................0.3
5.10 Life insurance coverage ........................................................49 .....n.................0.0 India.....................................55.4
5.11 Non–life insurance coverage..................................................17 .....n .................1.1 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................56 .....n.................0.2 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................32 .....n .................1.2 United States.......................10.8
5.14 Share of total number of securitization deals .......................51 .....n.................0.0 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
285
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ..................................................n/a .........................n/a Italy....................................348.2
6.10 Stock market capitalization to GDP ......................................n/a .........................n/a Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP .......................................n/a .........................n/a Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................43 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ............35 .....n .................1.5 Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP .............23 .....n...............30.6 Japan .................................184.6
6.15 Private international bonds to GDP .......................................37 .....n.................3.8 Ireland................................215.3
6.16 Public international bonds to GDP.........................................12 .....n.................8.3 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP .................n/a .........................n/a Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................54 .....n.................3.5 Switzerland ............................6.6
7.02 Venture capital availability......................................................54 .....n.................2.0 Hong Kong SAR ....................4.4
7.03 Ease of access to credit........................................................39 .....n.................2.7 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................57 .....n.................2.1 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................51 .....n.................2.1 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP.........................................51 .....n.................0.5 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ...................................19 .....n ......124,638.9 Japan............................717,241.6
7.08 Commercial bank branches ...................................................51 .....n.................0.0 Ireland ..................................57.3
7.09 Total number of ATMs...........................................................39 .....n...............28.2 Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .....................................................................23 .....n.................0.6 Bangladesh ..........................41.2
 2: Country/Economy Profiles

Vietnam
Key indicators Financial assets by major type, 2008
9.6%
Population (millions), 2009 .......................................................87.2 US$ bn
GDP (US$ billions), 2009 ...........................................................92.4
43.7% n Public debt securities .........43.7
GDP (current prices) per capita, 2009 ..............................1,059.9 n Private debt securities..........0.4
GDP (PPP) as share (%) of world total, 2009 ........................0.37 n Banking deposits .................59.3
Compound annual growth rate of real GDP (%), 2005–09 ..5.59 n Equity securities ....................9.6

59.3% 0.4% Total 112.9

Total/GDP 125.7%

Financial Development Index 2010

Rank (out of 57) Score (1–7 scale)

2010 Index......................................................46 3.0

1 2 3 4 5 6 7

Factors, policies, and institutions INPUTS

1st pillar: Institutional environment .........................................45 3.6

Financial sector liberalization ....................................................47 2.8
Corporate governance.................................................................43 4.1
Legal and regulatory issues .......................................................36 3.5
Contract enforcement..................................................................38 4.0
2nd pillar: Business environment .............................................51 3.5
Human capital ...............................................................................53 3.4
286
Taxes...............................................................................................55 2.9
Infrastructure ................................................................................36 3.6
Cost of doing business ................................................................49 4.0
3rd pillar: Financial stability......................................................48 3.9
Currency stability..........................................................................38 3.4
Banking system stability..............................................................31 4.4
Risk of sovereign debt crisis ......................................................47 3.6
1 2 3 4 5 6 7

Financial intermediation

4th pillar: Banking financial services......................................35 3.5

Size index .......................................................................................24 3.1
Efficiency index.............................................................................35 4.7
Financial information disclosure................................................38 1.9
5th pillar: Non-banking financial services .............................47 1.7
IPO activity.....................................................................................33 1.7
M&A activity..................................................................................48 1.3
Insurance .......................................................................................50 1.7
Securitization.................................................................................37 1.9
6th pillar: Financial markets......................................................50 1.4
Foreign exchange markets........................................................n/a n/a
Derivatives markets....................................................................n/a n/a
Equity market development ........................................................48 1.5
Bond market development..........................................................44 1.4
1 2 3 4 5 6 7

Financial access

7th pillar: Financial access........................................................18 3.7

Commercial access......................................................................22 3.7
Retail access ...............................................................................n/a n/a
1 2 3 4 5 6 7
OUTPUTS

Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
 Vietnam

2: Country/Economy Profiles
Financial Development Index in detail n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

1st pillar: Institutional environment

Financial sector liberalization
1.01 Capital account liberalization .................................................45 .....n.................0.0 Multiple (26) ..........................2.5
1.02 Commitments to WTO agreement on trade in services.......35 .....n...............52.3 Turkey ..................................83.5
1.03 Domestic financial sector liberalization .................................51 .....n.................2.0 Multiple (35)...........................1.0

Corporate governance
1.04 Extent of incentive-based compensation ..............................32 .....n.................4.2 Canada...................................5.2
1.05 Efficacy of corporate boards .................................................36 .....n.................4.5 Sweden .................................5.9
1.06 Reliance on professional management .................................41 .....n.................4.2 Sweden .................................6.5
1.07 Willingness to delegate.........................................................39 .....n.................3.6 Sweden .................................6.5
1.08 Strength of auditing and reporting standards .......................53 .....n.................3.8 South Africa...........................6.4
1.09 Ethical behavior of firms........................................................35 .....n.................3.9 Sweden .................................6.8
1.10 Protection of minority shareholders’ interests ......................37 .....n.................4.3 Sweden .................................6.0

Legal and regulatory issues

1.11 Burden of government regulation .........................................46 .....n.................2.6 Singapore ..............................5.5
1.12 Centralization of economic policymaking ..............................24 .....n.................3.4 Switzerland ............................5.6
1.13 Regulation of securities exchanges.......................................44 .....n.................3.9 South Africa...........................6.0
1.14 Property rights.......................................................................42 .....n.................4.1 Switzerland ............................6.4
1.15 Intellectual property protection .............................................50 .....n.................2.7 Sweden .................................6.2
1.16 Diversion of public funds.......................................................34 .....n.................3.3 Sweden .................................6.5
1.17 Public trust of politicians .......................................................18 .....n.................3.9 Singapore ..............................6.4
1.18 Corruption perceptions index ................................................49 .....n.................2.7 Denmark................................9.3
1.19 Strength of legal rights index ................................................12 .....n.................8.0 Multiple (3)...........................10.0
1.20 Central bank transparency....................................................n/a .........................n/a Sweden ...............................15.0 287
Contract enforcement
1.21 Effectiveness of law-making bodies ......................................23 .....n.................4.1 Singapore ..............................6.5
1.22 Judicial independence ...........................................................36 .....n.................3.9 Sweden .................................6.6
1.23 Irregular payments in judicial decisions.................................45 .....n.................3.2 Sweden .................................6.8
1.24 Time to enforce a contract ......................................................6 .....n.............295.0 Singapore...........................150.0
1.25 Number of procedures to enforce a contract .......................26 .....n...............34.0 Ireland..................................20.0
1.26 Strength of investor protection index....................................56 .....n.................2.7 Singapore ..............................9.3
1.27 Cost of enforcing contracts...................................................39 .....n...............28.5 Norway ..................................9.9

2nd pillar: Business environment

Human capital
2.01 Quality of management schools ...........................................53 .....n.................3.5 Switzerland ............................6.1
2.02 Quality of math and science education.................................29 .....n.................4.4 Singapore ..............................6.5
2.03 Extent of staff training...........................................................34 .....n.................4.1 Sweden .................................5.7
2.04 Local availability of specialized research
and training services .............................................................55 .....n.................3.4 Switzerland ............................6.5
2.05 Brain drain and ease of hiring foreign labor ..........................38 .....n.................3.8 Switzerland ............................5.7
2.06 Tertiary enrollment ................................................................55 .....n.................9.5 Korea, Rep...........................94.7

Taxes
2.07 Irregular payments in tax collection ......................................53 .....n.................3.1 Sweden .................................6.8
2.08 Distortive effect of taxes and subsidies on competition.......39 .....n.................4.0 Singapore ..............................5.8
2.09 Marginal tax variation ............................................................26 .....n.................5.8 China..................................–24.6
2.10 Time to pay taxes..................................................................56 .....n ...........1050.0 United Arab Emirates ..........12.0

Infrastructure
2.11 Quality of overall infrastructure .............................................54 .....n.................3.0 Switzerland ............................6.8
2.12 Quality of telephone infrastructure .......................................43 .....n.................6.0 Norway...................................7.0
2.13 Internet users .......................................................................44 .....n...............23.9 Sweden ................................87.8
2.14 Broadband Internet subscribers ............................................45 .....n.................2.4 Sweden................................41.2
2.15 Telephone lines......................................................................22 .....n...............34.0 Switzerland ..........................64.1
2.16 Mobile telephone subscribers...............................................24 .....n .............114.5 Turkey ................................208.7

Cost of doing business

2.17 Cost of starting a business ...................................................42 .....n ...............13.3 Denmark................................0.0

(Cont’d.)
 2: Country/Economy Profiles

Vietnam
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

2nd pillar: Business environment (cont’d.)

2.18 Cost of registering property ..................................................12 .....n .................1.1 Saudi Arabia...........................0.0
2.19 Cost of closing a business ....................................................31 .....n ...............15.0 Multiple (4).............................1.0
2.20 Time to start a business........................................................53 .....n...............50.0 Australia.................................2.0
2.21 Time to register property ......................................................46 .....n ...............57.0 Multiple (3) ............................2.0
2.22 Time to close a business ......................................................52 .....n.................5.0 Ireland....................................0.4

3rd pillar: Financial stability

Currency stability
3.01 Change in real effective exchange rate (REER) ....................n/a .........................n/a Venezuela ............................14.5
3.02 External vulnerability indicator...............................................17 .....n ...............47.4 Saudi Arabia ...........................7.0
3.03 Current account balance to GDP...........................................55 .....n ...............–9.8 Kuwait ..................................37.1
3.04 Dollarization vulnerability indicator ........................................42 .....n .............104.5 Multiple (23) ..........................0.0
3.05 External debt to GDP (developing economies) .....................18 .....n...............36.5 China .....................................9.4
3.06 Net international investment position to GDP
(advanced economies)..........................................................n/a .........................n/a Hong Kong SAR ................353.1

Banking system stability

3.07 Frequency of banking crises..................................................27 .....n .................1.5 Multiple (10)...........................0.0
3.08 Financial strengths indicator..................................................48 .....n.................2.0 Multiple (4) ............................9.0
3.09 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Ireland....................................6.8
3.10 Financial Stress Index...........................................................n/a .........................n/a Thailand ...............................–0.2
3.11 Tier 1 capital ratio .................................................................n/a .........................n/a Jordan..................................16.8
288 3.12 Output loss during banking crises...........................................1 .....n.................0.0 Multiple (21) ..........................0.0

Risk of sovereign debt crisis

3.13 Local currency sovereign rating.............................................47 .....n ...............10.0 Multiple (14) ........................20.0
3.14 Foreign currency sovereign rating .........................................49 .....n.................8.7 Multiple (13) ........................20.0
3.15 Aggregate macroprudential indicator ....................................41 .....n.................4.6 Panama..................................6.0
3.16 Manageability of public debt ................................................35 .....n...............52.2 Chile ......................................6.1
3.17 Credit default swap spreads .................................................44 .....n.............252.8 Norway ................................25.9

4th pillar: Banking financial services

Size index
4.01 Deposit money bank assets to GDP .....................................21 .....n .............102.5 Denmark ............................219.5
4.02 Central bank assets to GDP ..................................................26 .....n .................1.2 Egypt ...................................23.8
4.03 Financial system deposits to GDP ........................................22 .....n...............73.5 Hong Kong SAR ................285.2
4.04 M2 to GDP ............................................................................12 .....n .............122.7 Hong Kong SAR ................329.5
4.05 Private credit to GDP.............................................................23 .....n...............90.6 United States.....................210.7
4.06 Bank deposits to GDP ...........................................................24 .....n...............73.7 Hong Kong SAR ................289.1
4.07 Money market instruments to GDP ......................................26 .....n.................0.0 Ireland..................................43.6

Efficiency index
4.08 Aggregate profitability indicator.............................................11 .....n.................5.0 Netherlands ...........................6.5
4.09 Bank overhead costs ...............................................................2 .....n.................0.8 Singapore ..............................0.5
4.10 Public ownership of banks ....................................................57 .....n...............69.1 Austria ...................................0.0
4.11 Bank operating costs to assets .............................................30 .....n.................2.0 Ireland....................................0.6
4.12 Non-performing bank loans to total loans ............................n/a .........................n/a Australia .................................1.1

Financial information disclosure

4.13 Private credit bureau coverage..............................................49 .....n.................0.0 Argentina ...........................100.0
4.14 Public credit registry coverage ..............................................11 .....n ...............19.0 China ...................................62.1

5th pillar: Non-banking financial services

IPO activity
5.01 IPO market share ..................................................................43 .....n.................0.2 China ...................................22.0
5.02 IPO proceeds amount ...........................................................21 .....n.................0.3 Kazakhstan.............................1.1
5.03 Share of world IPOs ..............................................................40 .....n.................0.2 China....................................12.6
 Vietnam

2: Country/Economy Profiles
Financial Development Index in detail (cont’d.) n Development Advantage n Development Disadvantage

INDICATOR RANK/57 SCORE BEST PERFORMER SCORE

5th pillar: Non-banking financial services (cont’d.)

M&A activity
5.04 M&A market share ................................................................52 .....n.................0.0 United States ......................36.0
5.05 M&A transaction value to GDP .............................................47 .....n .................1.9 Netherlands .........................14.2
5.06 Share of total number of M&A deals ....................................35 .....n.................0.3 United States ......................23.0
Insurance
5.07 Life insurance density ...........................................................40 .....n.................0.7 Ireland..................................15.6
5.08 Non–life insurance density ...................................................47 .....n.................0.8 Netherlands ...........................9.4
5.09 Real growth of direct insurance premiums ...........................33 .....n.................0.0 China .....................................0.3
5.10 Life insurance coverage ........................................................25 .....n.................0.6 India.....................................55.4
5.11 Non–life insurance coverage .................................................23 .....n.................0.7 China....................................14.6
5.12 Relative value-added of insurance to GDP ............................47 .....n.................0.6 Bahrain ..................................5.9
Securitization
5.13 Securitization to GDP ............................................................30 .....n .................1.2 United States.......................10.8
5.14 Share of total number of securitization deals .......................33 .....n.................0.2 United States .......................61.7

6th pillar: Financial markets

Foreign exchange markets
6.01 Spot foreign exchange turnover............................................n/a .........................n/a United Kingdom ..................26.3
6.02 Outright forward foreign exchange turnover ........................n/a .........................n/a United Kingdom ..................29.2
6.03 Foreign exchange swap turnover..........................................n/a .........................n/a United Kingdom ..................40.8

Derivatives markets
289
6.04 Interest rate derivatives turnover: Forward rate
agreements ..........................................................................n/a .........................n/a United Kingdom ..................45.1
6.05 Interest rate derivatives turnover: Swaps.............................n/a .........................n/a United Kingdom ..................45.8
6.06 Interest rate derivatives turnover: Options...........................n/a .........................n/a United States ......................42.4
6.07 Foreign exchange derivatives turnover: Currency swaps .....n/a .........................n/a United Kingdom ..................46.7
6.08 Foreign exchange derivatives turnover: Options ..................n/a .........................n/a United Kingdom ..................42.4

Equity market development

6.09 Stock market turnover ratio ...................................................27 .....n...............64.4 Italy....................................348.2
6.10 Stock market capitalization to GDP .......................................49 .....n...............20.1 Hong Kong SAR ................603.5
6.11 Stock market value traded to GDP........................................35 .....n................17.7 Switzerland ........................541.2
6.12 Number of listed companies per 10,000 people...................47 .....n.................0.0 Hong Kong SAR .....................1.3

Bond market development

6.13 Private domestic bond market capitalization to GDP ...........n/a .........................n/a Denmark ............................175.7
6.14 Public domestic bond market capitalization to GDP.............n/a .........................n/a Japan .................................184.6
6.15 Private international bonds to GDP .......................................53 .....n.................0.3 Ireland................................215.3
6.16 Public international bonds to GDP ........................................34 .....n .................1.8 Panama................................34.1
6.17 Local currency corporate bond issuance to GDP ..................28 .....n.................0.5 Thailand .................................3.7

7th pillar: Financial access

Commercial access
7.01 Financial market sophistication .............................................51 .....n.................3.8 Switzerland ............................6.6
7.02 Venture capital availability......................................................37 .....n.................2.7 Hong Kong SAR ....................4.4
7.03 Ease of access to credit..........................................................8 .....n.................4.0 Indonesia ...............................4.3
7.04 Financing through local equity market ..................................24 .....n.................4.1 Hong Kong SAR ....................5.2
7.05 Ease of access to loans ........................................................41 .....n.................2.7 Bahrain ..................................4.9
7.06 Foreign direct investment to GDP .........................................12 .....n.................8.7 Hong Kong SAR ..................29.9

Retail access
7.07 Market penetration of bank accounts ..................................n/a .........................n/a Japan............................717,241.6
7.08 Commercial bank branches ...................................................47 .....n.................3.2 Ireland ..................................57.3
7.09 Total number of ATMs ..........................................................n/a .........................n/a Canada...............................218.5
7.10 Total number of point of sale (POS) devices ........................n/a .........................n/a Austria .............................4,174.1
7.11 Microfinance institution (MFI) borrowers’
penetration rate .......................................................................2 .....n...............29.0 Bangladesh ..........................41.2
Part 3
Data Tables
 How to Read the Data Tables
How to Read the Data Tables

The following pages provide detailed data for all 57 Two types of data are presented in the tables:
economies included in The Financial Development Report
• Executive Opinion Survey indicators: These
2010. The Data Tables are organized into seven sections:
data are the results drawn from the World
Economic Forum’s Executive Opinion Survey.
I. Institutional environment
II. Business environment • Other indicators: These data are indicators
III. Financial stability obtained from a variety of sources.
IV. Banking financial services
V. Non-banking financial services
VI. Financial markets Executive Opinion Survey indicators
VII. Financial access Data yielded from the World Economic Forum’s
Executive Opinion Survey are presented in blue-colored
The seven sections correspond to the seven pillars of the bar graphs. Survey questions asked for responses on a
Financial Development Index. scale of 1 to 7, where an answer of 1 corresponds to the
lowest possible score and an answer of 7 corresponds to
the highest possible score. For each Survey question,
individual responses are aggregated at the country level 293
in order to produce country scores. For more informa-
1.05 1.06 tion on the Executive Opinion Survey and a detailed
Efficacy of corporate boards Reliance on professional management explanation of how country scores are computed, please
How would you characterize corporate governance by investors and In your country, who holds senior management positions? [1 = usually
boards of directors in your country? [1 = management has little
accountability to investors and boards; 7 = investors and boards
relatives or friends without regard to merit; 7 = mostly professional
managers chosen for merit and qualifications] | 2009–10 weighted refer to Chapter 1.1.
exert strong supervision of management decisions] | 2009–10 average

For each Survey variable, the corresponding Survey

|

weighted average

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.83 7

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.73 7
1 Sweden ..............................6.46
1 Sweden ..............................5.93
2 South Africa........................5.85
3 Canada................................5.70
2 Norway ...............................6.25
3 Finland ................................6.11
question and the two extreme answers are shown. Scores
4 Canada................................6.10
4 Singapore ...........................5.57
5 Norway ...............................5.55
6 Australia..............................5.54
5 Netherlands ........................6.01
6 United Kingdom..................5.99 are reported with a precision of two decimal points,
7 Australia..............................5.96
7 Finland ................................5.52
8 Netherlands ........................5.26
9 Denmark.............................5.23
8 Singapore ...........................5.92
9 Switzerland.........................5.91
10 Denmark.............................5.85
although exact figures are used to determine rankings.
10 Switzerland.........................5.21
11 Ireland.................................5.76
11 Germany.............................5.19
12 United Kingdom..................5.19
13 Malaysia .............................5.17
12 Germany.............................5.71
13 United States......................5.58
For example, in the case of the variable 1.11 on the
14 Japan ..................................5.56
14 Chile ...................................5.11
15 Japan ..................................5.09
16 Bahrain ...............................5.00
15 Belgium ..............................5.53
16 South Africa........................5.49
17 Austria ................................5.32
burden of government regulation, Nigeria’s score is
17 Saudi Arabia........................5.00
18 Belgium ..............................4.99
19 United States......................4.99
18 Israel...................................5.26
19 Malaysia .............................5.25
20 Chile ...................................5.14
3.06466 and the Ireland’s score is 3.06167. These coun-
20 Austria ................................4.97
21 France.................................5.07
21 France.................................4.96
22 Slovak Republic ..................4.89
23 Czech Republic...................4.81
22 Czech Republic...................5.01
23 United Arab Emirates .........4.98
tries rank 30 and 31 respectively, although they are listed
24 Hong Kong SAR .................4.95
24 Hong Kong SAR .................4.80
25 United Arab Emirates .........4.80
26 Indonesia ............................4.73
25 Slovak Republic ..................4.94
26 Saudi Arabia........................4.90
27 Korea, Rep..........................4.89
with the same rounded score of 3.06.
27 Peru ....................................4.72
28 Philippines ..........................4.72
28 Philippines ..........................4.68
29 India....................................4.71
29 Colombia ............................4.65
30 China ..................................4.71
30 Israel...................................4.64
31 Brazil...................................4.66
31 Panama...............................4.63
32 Poland.................................4.64
32 Morocco .............................4.62
33 Brazil...................................4.55
34 Hungary ..............................4.51
33 Spain...................................4.56
34 Indonesia ............................4.54
35 Thailand ..............................4.47
A dotted line on the graph indicates the mean
35 Poland.................................4.49
36 Peru ....................................4.45
36 Vietnam ..............................4.49
37 India....................................4.47
37 Argentina ............................4.45
38 Romania .............................4.42
score across the 57 economies. Standard deviations,
38 Thailand ..............................4.45
39 Hungary ..............................4.30
39 Jordan.................................4.42
40 Egypt ..................................4.42
41 Ireland.................................4.41
40 Nigeria ................................4.26
41 Vietnam ..............................4.25
which give an indication of how closely or widely the
42 Bahrain ...............................4.18
42 China ..................................4.40
43 Kazakhstan .........................4.40
44 Romania .............................4.36
43 Colombia ............................4.18
44 Panama...............................4.11
45 Turkey .................................4.09
individual responses are spread around the mean country
45 Ukraine ...............................4.34
46 Egypt ..................................4.05
46 Spain...................................4.31
47 Korea, Rep..........................4.22
48 Argentina ............................4.16
47 Pakistan ..............................4.05
48 Bangladesh.........................3.93
score, can be provided upon request to the Centre for
49 Venezuela ...........................3.90
49 Turkey .................................4.15
50 Nigeria ................................4.13
51 Mexico................................4.10
50 Jordan.................................3.87
51 Russian Federation.............3.86
52 Mexico................................3.82
Global Competitiveness and Performance at the World
52 Russian Federation.............4.09
53 Kuwait ................................4.09
54 Pakistan ..............................4.06
53 Kuwait ................................3.76
54 Morocco .............................3.67
55 Kazakhstan .........................3.54
Economic Forum.
55 Bangladesh.........................3.99
56 Italy.....................................3.52
56 Italy.....................................3.91
57 Ukraine ...............................3.48
57 Venezuela ...........................3.76

SOURCE: World Economic Forum, Executive Opinion Survey

SOURCE: World Economic Forum, Executive Opinion Survey
 How to Read the Data Tables

1.01 1.02
Capital account liberalization Commitments to WTO agreement on trade in
services
This index measures the degree of capital account liberalization
within a country, standardized on a 1–7 (most liberalized) scale | This index measures the extent of commitments to the WTO’s General
2008 Agreement on Trade in Services (GATS) within the financial services
sector, standardized on a 1–7 (most liberalized) scale | 2008 or most
recent year available
RANK COUNTRY/ECONOMY SCORE
RANK COUNTRY/ECONOMY SCORE
1 Austria...................................7.00
1 Austria...................................7.00
1 Bahrain ..................................7.00
1 Belgium.................................7.00
1 Belgium.................................7.00
1 Canada ..................................7.00
1 Canada ..................................7.00
1 Denmark ...............................7.00
1 Denmark ...............................7.00
1 France ...................................7.00
1 Finland...................................7.00
1 Germany ...............................7.00
1 France ...................................7.00
1 Hungary.................................7.00
1 Germany ...............................7.00
1 Ireland ...................................7.00
1 Hong Kong SAR ....................7.00
1 Italy .......................................7.00
1 Hungary.................................7.00
1 Netherlands...........................7.00
1 Ireland ...................................7.00
1 Spain .....................................7.00
1 Israel .....................................7.00
1 Sweden.................................7.00
1 Italy .......................................7.00
1 Switzerland ...........................7.00
1 Japan.....................................7.00
1 United Kingdom ....................7.00
1 Jordan ...................................7.00
15 United States ........................6.85
1 Netherlands...........................7.00
16 Japan.....................................6.66
1 Norway..................................7.00
17 Bahrain ..................................6.11
1 Singapore ..............................7.00
18 Singapore ..............................6.01
1 Spain .....................................7.00
19 Norway..................................5.96
1 Sweden.................................7.00
20 Turkey....................................5.59
1 Switzerland ...........................7.00
21 Jordan ...................................5.05
1 United Arab Emirates............7.00
22 China .....................................5.00
1 United Kingdom ....................7.00
23 Panama .................................4.89
1 United States ........................7.00
24 Malaysia ................................4.87
25 Panama .................................6.84
25 Romania1 ...............................4.86
26 Romania ................................6.82
26 Philippines.............................4.82
27 Egypt.....................................6.17
27 United Arab Emirates............4.77
28 Czech Republic .....................5.95
28 Thailand.................................4.45
29 Chile ......................................5.67
29 Czech Republic .....................4.29
30 Australia ................................5.54
30 Nigeria...................................4.13
31 Malaysia ................................5.47
31 Finland...................................4.02
32 Peru.......................................4.77
32 Saudi Arabia ..........................3.97
33 Kuwait ...................................4.56
33 Hong Kong SAR ....................3.79
34 Slovak Republic.....................4.15
34 Israel .....................................3.76
35 Saudi Arabia ..........................3.88
35 Vietnam .................................3.48
36 Mexico ..................................3.49
36 Egypt.....................................3.39
37 Korea, Rep. ...........................3.48
37 Australia ................................3.34
38 Colombia ...............................3.47
38 Slovak Republic.....................3.32
39 Indonesia...............................3.37
39 Poland ...................................2.93
40 Brazil .....................................3.22
40 Argentina...............................2.67
41 Poland ...................................2.82
41 Kuwait ...................................2.66
42 Thailand.................................2.60
42 Morocco1...............................2.50
43 Philippines.............................2.57
43 South Africa ..........................2.48
44 Turkey....................................2.45
44 Colombia ...............................2.39
45 Vietnam .................................2.02
45 Indonesia...............................2.09
46 Russian Federation ...............1.76
46 Peru.......................................1.84
47 Nigeria...................................1.75
47 Mexico ..................................1.34
48 Argentina...............................1.01
48 Venezuela..............................1.24
49 Bangladesh ...........................1.00
49 Bangladesh ...........................1.00
49 China .....................................1.00
49 Brazil .....................................1.00
49 India ......................................1.00
49 Chile ......................................1.00
49 Kazakhstan ............................1.00
49 India ......................................1.00
49 Morocco................................1.00
49 Pakistan.................................1.00
49 Pakistan.................................1.00
n/a Kazakhstan ..............................n/a
49 South Africa ..........................1.00
n/a Korea, Rep. .............................n/a
49 Ukraine..................................1.00
n/a Russian Federation .................n/a
49 Venezuela..............................1.00
n/a Ukraine ....................................n/a

SOURCE: Menzie Chinn and Hiro Ito. 2010. “Financial Openness Index.”
Dataset available at http://www.ssc.wisc.edu/~mchinn/research.html. SOURCE: The World Bank, World Trade Indicators 2008
Interaction results from World Economic Forum analysis
1 2007

294 Other indicators

In the following pages, indicators not derived from
the Executive Opinion Survey are presented in black-
colored bar graphs. We use the latest data available from
international organizations (such as the International
Monetary Fund, the World Bank, various United
Nations agencies, the Bank of International Settlements,
and the International Telecommunication Union), the
research of respected academics in the field, and firms of
international stature that engage in professional research
on the topics related to the Index. For each indicator, a
short description appears at the top of the page. The base
year (i.e., the year when the majority of the data were
collected) follows the description. When the year differs
from the base year for a particular economy, this is indi-
cated in a footnote. When the data presented are hard
data, this is indicated in the column heading with the
term hard data; when the data presented are the results
of an index or a survey other than the Forum’s
Executive Opinion Survey, the column is headed with
the term score.
A more detailed description and the full source for
each variable can be found in the Technical Notes and
Sources section at the end of this Report. When data are
not available or are too outdated, “n/a” is used in lieu of
the rank and the value.
In the case of non-Survey indicators, true ties
between two or more economies are possible. In such
cases, shared rankings are indicated accordingly. For
example, the time it takes to close a business is 4.20
years in both Egypt and Kuwait. They share the rank of
48 for that variable in Table 2.22.
 Index of Data Tables
Index of Data Tables

Section 1: Institutional environment ..............................................297 3.04 Dollarization vulnerability indicator................................327

1.01 Capital account liberalization.........................................298
1.02 Commitments to WTO agreement on
trade in services ...........................................................298
1.03 Domestic financial sector liberalization.........................299
1.04 Extent of incentive-based compensation......................299
1.05 Efficacy of corporate boards .........................................300
1.06 Reliance on professional management.........................300
1.07 Willingness to delegate.................................................301
1.08 Strength of auditing and reporting standards ...............301
1.09 Ethical behavior of firms ...............................................302
1.10 Protection of minority shareholders’ interests .............302
1.11 Burden of government regulation.................................303
1.12 Centralization of economic policymaking .....................303
1.13 Regulation of securities exchanges ..............................304
1.14 Property rights ..............................................................304
1.15 Intellectual property protection.....................................305
1.16 Diversion of public funds ..............................................305
1.17 Public trust of politicians...............................................306
1.18 Corruption perceptions index........................................306
1.19 Strength of legal rights index........................................307
1.20 Central bank transparency ............................................307
1.21 Effectiveness of law-making bodies .............................308
1.22 Judicial independence ..................................................308
1.23 Irregular payments in judicial decisions ........................309
1.24 Time to enforce a contract ...........................................309
1.25 Number of procedures to enforce a contract ...............310
1.26 Strength of investor protection index ...........................310
1.27 Cost of enforcing contracts...........................................311
Section II: Business environment...................................................313
2.01 Quality of management schools ...................................314
2.02 Quality of math and science education ........................314
2.03 Extent of staff training ..................................................315
2.04 Local availability of specialized research
and training services .....................................................315
2.05 Brain drain and ease of hiring foreign labor ..................316
2.06 Tertiary enrollment ........................................................316
2.07 Irregular payments in tax collection ..............................317
2.08 Distortive effect of taxes and subsidies
on competition ..............................................................317
2.09 Marginal tax variation ....................................................318
2.10 Time to pay taxes .........................................................318
2.11 Quality of overall infrastructure .....................................319
2.12 Quality of telephone infrastructure ...............................319
2.13 Internet users ...............................................................320
2.14 Broadband Internet subscribers....................................320
2.15 Telephone lines .............................................................321
2.16 Mobile telephone subscribers ......................................321
2.17 Cost of starting a business ...........................................322
2.18 Cost of registering property..........................................322
2.19 Cost of closing a business............................................323
2.20 Time to start a business ...............................................323
2.21 Time to register property..............................................324
2.22 Time to close a business ..............................................324
Section III: Financial stability..........................................................325
3.01 Change in real effective exchange rate (REER) ............326
3.02 External vulnerability indicator ......................................326
3.03 Current account balance to GDP ..................................327
3.05 External debt to GDP (developing economies).............328
3.06 Net international investment position to
GDP advanced economies)...........................................328
3.07 Frequency of banking crises .........................................329
3.08 Financial strengths indicator .........................................329
3.09 Aggregate measure of real estate bubbles ..................330
3.10 Financial Stress Index ...................................................330
3.11 Tier 1 capital ratio .........................................................331
3.12 Output loss during banking crises ................................331
3.13 Local currency sovereign rating ....................................332
3.14 Foreign currency sovereign rating.................................332
3.15 Aggregate macroprudential indicator ............................333
3.16 Manageability of public debt.........................................333
3.17 Credit default swap spreads .........................................334
Section IV: Banking financial services.........................................335
4.01 Deposit money bank assets to GDP.............................336
4.02 Central Bank assets to GDP .........................................336
4.03 Financial system deposits to GDP................................337
4.04 M2 to GDP....................................................................337 295
4.05 Private credit to GDP ....................................................338
4.06 Bank deposits to GDP...................................................338
4.07 Money market instruments to GDP..............................339
4.08 Aggregate profitability indicator ....................................339
4.09 Bank overhead costs.....................................................340
4.10 Public ownership of banks............................................340
4.11 Bank operating costs to assets ....................................341
4.12 Non-performing bank loans to total loans.....................341
4.13 Private credit bureau coverage .....................................342
4.14 Public credit registry coverage......................................342
Section V: Non-banking financial services .................................343
5.01 IPO market share..........................................................344
5.02 IPO proceeds amount...................................................344
5.03 Share of world IPOs......................................................345
5.04 M&A market share .......................................................345
5.05 M&A transaction value to GDP.....................................346
5.06 Share of total number of M&A deals ...........................346
5.07 Life insurance density...................................................347
5.08 Non–life insurance density............................................347
5.09 Real growth of direct insurance premiums ..................348
5.10 Life insurance coverage ................................................348
5.11 Non–life insurance coverage.........................................349
5.12 Relative value-added of insurance to GDP ...................349
5.13 Securitization to GDP....................................................350
5.14 Share of total number of securitization deals ...............350
Section VI: Financial markets..........................................................351
6.01 Spot foreign exchange turnover....................................352
6.02 Outright forward foreign exchange turnover.................352
6.03 Foreign exchange swap turnover ..................................353
6.04 Interest rate derivatives turnover: Forward
rate agreements ...........................................................353
6.05 Interest rate derivatives turnover: Swaps .....................354
6.06 Interest rate derivatives turnover: Options ...................354
6.07 Foreign exchange derivatives turnover:
Currency swaps ............................................................355
6.08 Foreign exchange derivatives turnover: Options...........355
 Index of Data Tables

6.09 Stock market turnover ratio...........................................356

6.10 Stock market capitalization to GDP...............................356
6.11 Stock market value traded to GDP ...............................357
6.12 Number of listed companies per
10,000 people ...............................................................357
6.13 Private domestic bond market
capitalization to GDP.....................................................358
6.14 Public domestic bond market
capitalization to GDP.....................................................358
6.15 Private international bonds to GDP...............................359
6.16 Public international bonds to GDP ................................359
6.17 Local currency corporate bond
issuance to GDP ...........................................................360

Section VII: Financial access ..........................................................361

7.01 Financial market sophistication.....................................362
7.02 Venture capital availability .............................................362
7.03 Ease of access to credit ...............................................363
7.04 Financing through local equity market..........................363
7.05 Ease of access to loans ................................................364
7.06 Foreign direct investment to GDP ................................364
7.07 Market penetration of bank accounts...........................365
7.08 Commercial bank branches...........................................365
7.09 Total number of ATMs ..................................................366
7.10 Total number of point of sale (POS)
devices..........................................................................366
7.11 Microfinance institution (MFI) borrowers’
penetration rate ............................................................367

296
Data Tables

Section I
Institutional environment
 3: Data Tables | Institutional environment
1.01 1.02
Capital account liberalization Commitments to WTO agreement on trade in
services
This index measures the degree of capital account liberalization
within a country, standardized on a 1–7 (most liberalized) scale | This index measures the extent of commitments to the WTO’s General
2008 Agreement on Trade in Services (GATS) within the financial services
sector, standardized on a 1–7 (most liberalized) scale | 2008 or most
recent year available
RANK COUNTRY/ECONOMY SCORE
RANK COUNTRY/ECONOMY SCORE
1 Austria....................................7.00
1 Austria....................................7.00
1 Bahrain...................................7.00
1 Belgium..................................7.00
1 Belgium..................................7.00
1 Canada ...................................7.00
1 Canada ...................................7.00
1 Denmark ................................7.00
1 Denmark ................................7.00
1 France ....................................7.00
1 Finland ...................................7.00
1 Germany ................................7.00
1 France ....................................7.00
1 Hungary .................................7.00
1 Germany ................................7.00
1 Ireland ....................................7.00
1 Hong Kong SAR.....................7.00
1 Italy ........................................7.00
1 Hungary .................................7.00
1 Netherlands ...........................7.00
1 Ireland ....................................7.00
1 Spain ......................................7.00
1 Israel ......................................7.00
1 Sweden..................................7.00
1 Italy ........................................7.00
1 Switzerland ............................7.00
1 Japan .....................................7.00
1 United Kingdom.....................7.00
1 Jordan ....................................7.00
15 United States ........................6.85
1 Netherlands ...........................7.00
16 Japan.....................................6.66
1 Norway ..................................7.00
17 Bahrain ..................................6.11
1 Singapore...............................7.00
18 Singapore ..............................6.01
1 Spain ......................................7.00
19 Norway..................................5.96
1 Sweden..................................7.00
20 Turkey....................................5.59
1 Switzerland ............................7.00
21 Jordan ...................................5.05
1 United Arab Emirates ............7.00
298 22 China .....................................5.00
1 United Kingdom.....................7.00
23 Panama .................................4.89
1 United States.........................7.00
24 Malaysia ................................4.87
25 Panama .................................6.84
25 Romania1 ...............................4.86
26 Romania ................................6.82
26 Philippines.............................4.82
27 Egypt .....................................6.17
27 United Arab Emirates............4.77
28 Czech Republic......................5.95
28 Thailand .................................4.45
29 Chile ......................................5.67
29 Czech Republic......................4.29
30 Australia ................................5.54
30 Nigeria ...................................4.13
31 Malaysia ................................5.47
31 Finland...................................4.02
32 Peru .......................................4.77
32 Saudi Arabia ..........................3.97
33 Kuwait ...................................4.56
33 Hong Kong SAR ....................3.79
34 Slovak Republic .....................4.15
34 Israel......................................3.76
35 Saudi Arabia ..........................3.88
35 Vietnam .................................3.48
36 Mexico ..................................3.49
36 Egypt.....................................3.39
37 Korea, Rep. ...........................3.48
37 Australia ................................3.34
38 Colombia ...............................3.47
38 Slovak Republic .....................3.32
39 Indonesia...............................3.37
39 Poland ...................................2.93
40 Brazil .....................................3.22
40 Argentina...............................2.67
41 Poland ...................................2.82
41 Kuwait ...................................2.66
42 Thailand .................................2.60
42 Morocco1...............................2.50
43 Philippines.............................2.57
43 South Africa ..........................2.48
44 Turkey....................................2.45
44 Colombia ...............................2.39
45 Vietnam .................................2.02
45 Indonesia...............................2.09
46 Russian Federation ................1.76
46 Peru .......................................1.84
47 Nigeria ...................................1.75
47 Mexico...................................1.34
48 Argentina ...............................1.01
48 Venezuela ..............................1.24
49 Bangladesh ............................1.00
49 Bangladesh ............................1.00
49 China .....................................1.00
49 Brazil......................................1.00
49 India.......................................1.00
49 Chile ......................................1.00
49 Kazakhstan ............................1.00
49 India.......................................1.00
49 Morocco ................................1.00
49 Pakistan .................................1.00
49 Pakistan .................................1.00
n/a Kazakhstan ..............................n/a
49 South Africa...........................1.00
n/a Korea, Rep...............................n/a
49 Ukraine ..................................1.00
n/a Russian Federation..................n/a
49 Venezuela ..............................1.00
n/a Ukraine ....................................n/a

SOURCE: Menzie Chinn and Hiro Ito. 2010. “Financial Openness Index.”
Dataset available at http://www.ssc.wisc.edu/~mchinn/research.html. SOURCE: The World Bank, World Trade Indicators 2008
Interaction results from World Economic Forum analysis
1 2007
1.03
Domestic financial sector liberalization
This index measures the degree of domestic financial sector liberal-
ization within a country, standardized on a 1–7 (most liberalized)
scale | 2009
RANK COUNTRY/ECONOMY SCORE
1 Australia .................................7.00
1 Austria....................................7.00
1 Bahrain...................................7.00
1 Belgium..................................7.00
1 Canada ...................................7.00
1 Denmark ................................7.00
1 Finland ...................................7.00
1 France ....................................7.00
1 Germany ................................7.00
1 Hong Kong SAR.....................7.00
1 Ireland ....................................7.00
1 Israel ......................................7.00
1 Italy ........................................7.00
1 Japan .....................................7.00
1 Malaysia.................................7.00
1 Netherlands ...........................7.00
1 Norway ..................................7.00
1 Singapore...............................7.00
1 Spain ......................................7.00
1 Sweden..................................7.00
1 United Kingdom.....................7.00
1 United States.........................7.00
23 Panama .................................6.84
24 Romania ................................6.82
25 Thailand .................................6.67
26 South Africa ..........................6.06
27 Chile ......................................6.05
28 Nigeria...................................5.97
29 Philippines.............................5.87
30 Brazil .....................................5.57
31 Switzerland............................5.41
32 United Arab Emirates............5.09
33 Mexico ..................................5.09
34 Colombia ...............................5.06
35 Peru .......................................4.77
36 Morocco................................4.57
37 Argentina...............................4.48
38 Korea, Rep. ...........................4.39
39 Hungary ................................4.24
40 China .....................................3.86
41 Kuwait ...................................3.80
42 Poland ...................................3.67
43 Egypt.....................................3.53
44 Czech Republic......................3.40
45 Saudi Arabia ..........................3.23
46 Turkey ....................................3.19
47 Slovak Republic .....................3.15
48 India.......................................3.14
49 Kazakhstan ............................2.92
50 Pakistan.................................2.87
51 Vietnam .................................2.82
52 Indonesia...............................2.81
53 Russian Federation................2.58
54 Ukraine..................................2.49
55 Venezuela ..............................1.00
n/a Bangladesh..............................n/a
n/a Jordan .....................................n/a
SOURCE: Graciela Kaminsky and Sergio Schmukler, 2003. “Short-Run
Pain, Long-Run Gain: The Effects of Financial Liberalization.” IMF
Working Paper 03/34, Washington, DC: IMF. Updated as of 2009
based on World Economic Forum analysis
1.04
3: Data Tables | Institutional environment
Extent of incentive-based compensation
To what extent is management compensation in your country based
on performance rather than fixed salaries? [1 = not at all—based on
fixed salaries; 7 = heavily—based on performance using bonuses or
equity compensation] | 2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.28 7
1 Canada................................5.16
2 Singapore............................5.16
3 Hong Kong SAR..................5.14
4 United States .....................5.07
5 Switzerland .........................5.05
6 South Africa........................5.05
7 United Kingdom..................5.01
8 Australia..............................4.90
9 Germany .............................4.84
10 Malaysia..............................4.67
11 Sweden ..............................4.65
12 Ireland.................................4.62
13 Slovak Republic ..................4.60
14 Saudi Arabia........................4.59
15 Chile ...................................4.58
16 China ..................................4.55
17 Netherlands ........................4.51
18 France.................................4.51
19 Denmark.............................4.50
20 United Arab Emirates .........4.47
21 Austria ................................4.47
22 Bahrain ...............................4.45
299
23 Czech Republic ...................4.42
24 Belgium ..............................4.39
25 Israel...................................4.39
26 Indonesia ............................4.36
27 Brazil...................................4.35
28 Japan ..................................4.35
29 Finland ................................4.34
30 Kuwait.................................4.26
31 Norway ...............................4.25
32 Vietnam ..............................4.23
33 Poland.................................4.21
34 Thailand ..............................4.18
35 Panama ...............................4.15
36 Hungary ..............................4.14
37 Korea, Rep. .........................4.11
38 Philippines ..........................4.08
39 Argentina ............................4.06
40 India....................................4.05
41 Egypt ..................................4.05
42 Kazakhstan .........................4.04
43 Spain...................................4.02
44 Ukraine ...............................4.01
45 Morocco .............................4.00
46 Peru ....................................3.98
47 Russian Federation .............3.96
48 Romania .............................3.87
49 Italy.....................................3.83
50 Nigeria ................................3.72
51 Mexico................................3.63
52 Colombia ............................3.60
53 Pakistan ..............................3.55
54 Jordan.................................3.35
55 Venezuela ...........................3.20
56 Turkey .................................3.19
57 Bangladesh .........................2.86
SOURCE: World Economic Forum, Executive Opinion Survey
 3: Data Tables | Institutional environment
1.05
Efficacy of corporate boards
How would you characterize corporate governance by investors and
boards of directors in your country? [1 = management has little
accountability to investors and boards; 7 = investors and boards
exert strong supervision of management decisions] | 2009–10
weighted average
1.06
Reliance on professional management
In your country, who holds senior management positions? [1 = usually
relatives or friends without regard to merit; 7 = mostly professional
managers chosen for merit and qualifications] | 2009–10 weighted
average

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.83 7

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.73 7
1 Sweden ..............................6.46
1 Sweden ..............................5.93
2 Norway ...............................6.25
2 South Africa........................5.85
3 Finland ................................6.11
3 Canada................................5.70
4 Canada ................................6.10
4 Singapore ...........................5.57
5 Netherlands ........................6.01
5 Norway ...............................5.55
6 United Kingdom..................5.99
6 Australia..............................5.54
7 Australia..............................5.96
7 Finland ................................5.52
8 Singapore ...........................5.92
8 Netherlands ........................5.26
9 Switzerland .........................5.91
9 Denmark.............................5.23
10 Denmark.............................5.85
10 Switzerland .........................5.21
11 Ireland .................................5.76
11 Germany .............................5.19
12 Germany .............................5.71
12 United Kingdom..................5.19
13 United States .....................5.58
13 Malaysia..............................5.17
14 Japan ..................................5.56
14 Chile....................................5.11
15 Belgium ..............................5.53
15 Japan ..................................5.09
16 South Africa........................5.49
16 Bahrain ...............................5.00
17 Austria ................................5.32
17 Saudi Arabia........................5.00
18 Israel...................................5.26
18 Belgium ..............................4.99
19 Malaysia..............................5.25
19 United States .....................4.99
20 Chile....................................5.14
20 Austria ................................4.97
21 France.................................5.07
21 France.................................4.96
22 Czech Republic ...................5.01
300 22 Slovak Republic ..................4.89
23 United Arab Emirates .........4.98
23 Czech Republic ...................4.81
24 Hong Kong SAR..................4.95
24 Hong Kong SAR..................4.80
25 Slovak Republic ..................4.94
25 United Arab Emirates .........4.80
26 Saudi Arabia........................4.90
26 Indonesia ............................4.73
27 Korea, Rep..........................4.89
27 Peru ....................................4.72
28 Philippines ..........................4.72
28 Philippines ..........................4.68
29 India....................................4.71
29 Colombia ............................4.65
30 China ..................................4.71
30 Israel...................................4.64
31 Brazil...................................4.66
31 Panama...............................4.63
32 Poland.................................4.64
32 Morocco .............................4.62
33 Spain...................................4.56
33 Brazil...................................4.55
34 Indonesia ............................4.54
34 Hungary ..............................4.51
35 Thailand ..............................4.47
35 Poland.................................4.49
36 Peru ....................................4.45
36 Vietnam ..............................4.49
37 Argentina ............................4.45
37 India....................................4.47
38 Romania .............................4.42
38 Thailand ..............................4.45
39 Hungary ..............................4.30
39 Jordan.................................4.42
40 Nigeria ................................4.26
40 Egypt ..................................4.42
41 Vietnam ..............................4.25
41 Ireland.................................4.41
42 Bahrain................................4.18
42 China ..................................4.40
43 Colombia.............................4.18
43 Kazakhstan .........................4.40
44 Panama ...............................4.11
44 Romania .............................4.36
45 Turkey .................................4.09
45 Ukraine ...............................4.34
46 Egypt ..................................4.05
46 Spain...................................4.31
47 Pakistan ..............................4.05
47 Korea, Rep..........................4.22
48 Bangladesh .........................3.93
48 Argentina ............................4.16
49 Venezuela ...........................3.90
49 Turkey .................................4.15
50 Jordan.................................3.87
50 Nigeria ................................4.13
51 Russian Federation .............3.86
51 Mexico ................................4.10
52 Mexico................................3.82
52 Russian Federation .............4.09
53 Kuwait .................................3.76
53 Kuwait.................................4.09
54 Morocco .............................3.67
54 Pakistan ..............................4.06
55 Kazakhstan .........................3.54
55 Bangladesh .........................3.99
56 Italy.....................................3.52
56 Italy.....................................3.91
57 Ukraine ...............................3.48
57 Venezuela............................3.76

SOURCE: World Economic Forum, Executive Opinion Survey

SOURCE: World Economic Forum, Executive Opinion Survey
1.07 1.08

3: Data Tables | Institutional environment

Willingness to delegate
In your country, how do you assess the willingness to delegate
authority to subordinates? [1 = low—top management controls all
important decisions; 7 = high—authority is mostly delegated to
business unit heads and other lower-level managers] | 2009–10
weighted average
Strength of auditing and reporting standards
In your country, how would you assess financial auditing and
reporting standards regarding company financial performance? [1 =
extremely weak; 7 = extremely strong] | 2009–10 weighted average

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 5.02 7

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.11 7
1 South Africa........................6.36
1 Sweden ..............................6.47
2 Sweden ..............................6.32
2 Norway ...............................5.93
3 Singapore............................6.19
3 Denmark.............................5.80
4 Finland ................................6.17
4 Netherlands ........................5.69
5 Canada................................6.12
5 Switzerland .........................5.22
6 Norway ...............................6.10
6 Finland ................................5.15
7 Hong Kong SAR..................5.93
7 Canada................................5.13
8 Australia ..............................5.76
8 United States .....................5.09
9 Netherlands ........................5.76
9 Germany .............................5.01
10 Austria ................................5.70
10 Australia..............................4.87
11 Denmark.............................5.66
11 Japan ..................................4.80
12 Bahrain ...............................5.65
12 Belgium ..............................4.80
13 Germany .............................5.62
13 United Kingdom..................4.79
14 United Kingdom..................5.62
14 Malaysia..............................4.64
15 Belgium ..............................5.61
15 Austria ................................4.63
16 Chile ...................................5.58
16 Saudi Arabia........................4.63
17 Switzerland .........................5.58
17 United Arab Emirates .........4.57
18 France.................................5.54
18 Singapore ...........................4.45
19 Israel...................................5.52
19 Ireland.................................4.33
20 Hungary ..............................5.40
20 Czech Republic ...................4.33
21 Malaysia..............................5.40
21 Kuwait.................................4.23
22 Japan ..................................5.36
22 Israel...................................4.21 301
23 United Arab Emirates .........5.36
23 Bahrain ...............................4.20
24 Saudi Arabia........................5.36
24 South Africa ........................4.15
25 Jordan.................................5.31
25 Indonesia ............................4.15
26 Thailand ..............................5.14
26 Hong Kong SAR..................4.12
27 India ....................................5.13
27 Panama...............................4.05
28 Poland .................................5.12
28 Philippines ..........................4.00
29 Czech Republic ...................5.10
29 Poland.................................4.00
30 Panama...............................5.03
30 Nigeria ................................3.97
31 United States .....................4.98
31 Brazil...................................3.95
32 Spain...................................4.87
32 Slovak Republic ..................3.92
33 Egypt ..................................4.83
33 France.................................3.89
34 Slovak Republic ..................4.82
34 India....................................3.88
35 Peru ....................................4.81
35 Colombia ............................3.85
36 China ..................................4.79
36 Egypt ..................................3.70
37 Brazil ...................................4.76
37 Spain...................................3.66
38 Kuwait.................................4.75
38 Argentina ............................3.65
39 Mexico................................4.70
39 Vietnam ..............................3.64
40 Ireland.................................4.68
40 Peru ....................................3.64
41 Philippines ..........................4.64
41 Chile ...................................3.64
42 Romania .............................4.63
42 China ..................................3.63
43 Indonesia ............................4.62
43 Jordan.................................3.55
44 Turkey .................................4.37
44 Thailand ..............................3.47
45 Colombia ............................4.32
45 Romania .............................3.44
46 Korea, Rep..........................4.26
46 Pakistan ..............................3.34
47 Pakistan ..............................4.23
47 Mexico................................3.33
48 Kazakhstan..........................4.19
48 Korea, Rep..........................3.30
49 Morocco .............................4.16
49 Kazakhstan .........................3.18
50 Venezuela ...........................3.98
50 Morocco .............................3.18
51 Italy.....................................3.97
51 Italy .....................................3.18
52 Russian Federation .............3.85
52 Russian Federation .............3.09
53 Vietnam ..............................3.84
53 Venezuela ...........................3.08
54 Bangladesh .........................3.84
54 Hungary ..............................3.04
55 Argentina ............................3.80
55 Ukraine ...............................3.03
56 Ukraine ...............................3.51
56 Turkey .................................2.84
57 Nigeria ................................3.45
57 Bangladesh .........................2.77

SOURCE: World Economic Forum, Executive Opinion Survey

SOURCE: World Economic Forum, Executive Opinion Survey
 3: Data Tables | Institutional environment
1.09
Ethical behavior of firms
How would you compare the corporate ethics (ethical behavior in
interactions with public officials, politicians, and other enterprises)
of firms in your country with those of other countries in the world?
[1 = among the worst in the world; 7 = among the best in the world] |
2009–10 weighted average
1.10
Protection of minority shareholders’ interests
In your country, to what extent are the interests of minority
shareholders protected by the legal system? [1 = not protected at all;
7 = fully protected] | 2009–10 weighted average

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.53 7

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.64 7
1 Sweden ..............................6.05
1 Sweden ..............................6.78
2 Finland ................................5.95
2 Finland ................................6.62
3 Norway ...............................5.84
3 Singapore ...........................6.58
4 South Africa........................5.61
4 Denmark.............................6.50
5 Singapore ...........................5.52
5 Switzerland .........................6.44
6 Canada................................5.41
6 Norway ...............................6.37
7 Denmark.............................5.36
7 Canada................................6.34
8 Germany .............................5.23
8 Netherlands ........................6.29
9 Australia..............................5.20
9 Australia ..............................6.17
10 United Kingdom..................5.14
10 Austria ................................6.15
11 Netherlands ........................5.11
11 Germany .............................6.04
12 Saudi Arabia ........................5.10
12 United Kingdom..................6.02
13 Bahrain................................5.10
13 Hong Kong SAR..................5.96
14 United Arab Emirates .........5.07
14 France.................................5.65
15 Israel...................................5.04
15 Japan ..................................5.64
16 Malaysia..............................5.02
16 Chile ...................................5.56
17 Japan ..................................5.01
17 Belgium ..............................5.51
18 Belgium ..............................4.90
18 United Arab Emirates .........5.41
19 Jordan.................................4.89
19 Israel...................................5.34
20 Hong Kong SAR..................4.85
20 Ireland.................................5.34
21 Chile ...................................4.83
21 Bahrain ...............................5.33
22 Austria ................................4.78
302 22 United States......................5.16
23 United States .....................4.75
23 Saudi Arabia........................5.16
24 Switzerland .........................4.73
24 Spain...................................4.70
25 France.................................4.66
25 Malaysia..............................4.67
26 Thailand ..............................4.65
26 Jordan.................................4.53
27 Panama...............................4.65
27 South Africa........................4.51
28 Egypt ..................................4.61
28 Kuwait.................................4.43
29 Indonesia ............................4.59
29 Poland.................................4.20
30 India....................................4.50
30 China...................................4.18
31 Ireland.................................4.48
31 Panama ...............................4.15
32 Morocco .............................4.48
32 Korea, Rep. .........................4.15
33 Poland.................................4.45
33 Egypt ..................................4.13
34 Peru ....................................4.40
34 Colombia ............................3.95
35 Brazil...................................4.39
35 Vietnam ..............................3.91
36 China ..................................4.37
36 India....................................3.86
37 Vietnam ..............................4.26
37 Thailand ..............................3.85
38 Slovak Republic ..................4.19
38 Morocco .............................3.77
39 Spain...................................4.15
39 Turkey..................................3.74
40 Hungary ..............................4.13
40 Italy.....................................3.70
41 Romania..............................4.12
41 Peru ....................................3.62
42 Philippines ..........................4.07
42 Kazakhstan .........................3.62
43 Mexico................................4.05
43 Czech Republic ...................3.61
44 Kuwait .................................4.01
44 Slovak Republic ..................3.59
45 Czech Republic ...................3.97
45 Romania .............................3.58
46 Colombia ............................3.96
46 Mexico................................3.55
47 Pakistan ..............................3.93
47 Brazil...................................3.55
48 Turkey .................................3.89
48 Indonesia ............................3.47
49 Korea, Rep..........................3.83
49 Pakistan ..............................3.44
50 Kazakhstan .........................3.63
50 Hungary ..............................3.34
51 Nigeria ................................3.62
51 Russian Federation .............3.29
52 Argentina ............................3.50
52 Argentina ............................3.28
53 Bangladesh .........................3.44
53 Bangladesh .........................3.27
54 Italy.....................................3.39
54 Nigeria.................................3.11
55 Venezuela ...........................3.27
55 Venezuela ...........................3.07
56 Russian Federation .............3.22
56 Philippines ..........................3.03
57 Ukraine ...............................2.82
57 Ukraine ...............................3.01

SOURCE: World Economic Forum, Executive Opinion Survey

SOURCE: World Economic Forum, Executive Opinion Survey
1.11 1.12

3: Data Tables | Institutional environment

Burden of government regulation
How burdensome is it for businesses in your country to comply with
governmental administrative requirements (e.g., permits, regulations,
reporting)? [1 = extremely burdensome; 7 = not burdensome at all] |
2009–10 weighted average
Centralization of economic policymaking
How centralized is economic policymaking in your country?
[1 = highly centralized—national government controls almost all
important decisions; 7 = decentralized—states and cities have
significant control over economic development] | 2009–10 weighted
average

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.22 7

RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.28 7
1 Singapore ...........................5.53
1 Switzerland .........................5.57
2 Hong Kong SAR..................5.15
2 Belgium ..............................5.35
3 Finland ................................4.32
3 Spain...................................5.15
4 United Arab Emirates .........4.31
4 Germany .............................4.76
5 Switzerland .........................4.21
5 Canada................................4.61
6 Sweden ..............................4.04
6 Australia..............................4.45
7 Malaysia..............................4.04
7 Indonesia ............................4.40
8 Saudi Arabia........................4.04
8 Poland.................................4.37
9 Bahrain................................4.01
9 Austria ................................4.36
10 China ..................................4.00
10 Czech Republic ...................4.27
11 Denmark.............................3.83
11 United States......................4.16
12 Indonesia ............................3.65
12 Finland ................................4.08
13 Austria ................................3.63
13 Saudi Arabia ........................4.01
14 Panama...............................3.62
14 Netherlands ........................3.90
15 Canada................................3.62
15 China ..................................3.87
16 Thailand ..............................3.60
16 Denmark.............................3.77
17 Chile ...................................3.59
17 Hong Kong SAR ..................3.74
18 United States .....................3.48
18 United Arab Emirates .........3.72
19 Jordan.................................3.48
19 Israel...................................3.71
20 Norway ...............................3.41
20 Sweden ..............................3.64
21 Australia..............................3.40
21 Malaysia..............................3.61
22 Morocco .............................3.39
22 India....................................3.60 303
23 Japan ..................................3.28
23 Italy.....................................3.52
24 Pakistan ..............................3.24
24 Vietnam ..............................3.43
25 Kazakhstan .........................3.22
25 Kazakhstan .........................3.28
26 Netherlands ........................3.13
26 Peru ....................................3.27
27 Egypt ..................................3.12
27 Pakistan ..............................3.24
28 Turkey .................................3.08
28 Slovak Republic ..................3.16
29 Israel...................................3.07
29 Colombia ............................3.09
30 Nigeria ................................3.06
30 Norway ...............................3.05
31 Ireland.................................3.06
31 Romania .............................3.04
32 United Kingdom..................3.06
32 Mexico................................3.04
33 Germany .............................3.03
33 Morocco .............................3.01
34 South Africa........................3.00
34 Ukraine ...............................2.99
35 India....................................2.99
35 France.................................2.93
36 Romania .............................2.92
36 Korea, Rep..........................2.92
37 Bangladesh .........................2.89
37 Hungary ..............................2.89
38 Slovak Republic ..................2.84
38 Russian Federation .............2.82
39 Korea, Rep..........................2.81
39 Philippines ..........................2.81
40 Spain ...................................2.76
40 South Africa........................2.80
41 Poland.................................2.71
41 Bahrain................................2.76
42 Mexico................................2.68
42 Nigeria ................................2.75
43 Kuwait.................................2.68
43 Brazil...................................2.71
44 Czech Republic ...................2.67
44 Thailand ..............................2.68
45 Peru ....................................2.66
45 Jordan.................................2.58
46 Vietnam ..............................2.62
46 United Kingdom..................2.53
47 Belgium ..............................2.62
47 Chile ...................................2.53
48 France.................................2.61
48 Japan ..................................2.45
49 Argentina ............................2.61
49 Kuwait.................................2.38
50 Colombia ............................2.61
50 Turkey .................................2.26
51 Ukraine ...............................2.59
51 Panama...............................2.21
52 Philippines ..........................2.54
52 Egypt ..................................2.05
53 Russian Federation .............2.47
53 Singapore ...........................2.00
54 Italy.....................................2.22
54 Bangladesh .........................1.92
55 Hungary ..............................2.20
55 Ireland .................................1.77
56 Venezuela ...........................2.13
56 Argentina.............................1.68
57 Brazil ...................................1.92
57 Venezuela............................1.41

SOURCE: World Economic Forum, Executive Opinion Survey

SOURCE: World Economic Forum, Executive Opinion Survey
 3: Data Tables | Institutional environment
1.13
Regulation of securities exchanges
How would you assess the regulation and supervision of securities
exchanges in your country? [1 = ineffective; 7 = effective] | 2009–10
weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.57
1 South Africa........................6.04
2 Sweden ..............................5.91
3 Singapore ...........................5.78
4 Norway ...............................5.73
5 Brazil...................................5.69
6 Finland ................................5.63
7 Switzerland .........................5.61
8 Australia..............................5.53
9 Hong Kong SAR..................5.44
10 Bahrain ...............................5.35
11 Denmark.............................5.32
12 India....................................5.28
13 France.................................5.22
14 Malaysia..............................5.19
15 Netherlands ........................5.17
16 Canada................................5.17
17 Saudi Arabia........................5.09
18 United Arab Emirates .........5.08
19 Jordan.................................5.03
20 Poland.................................4.99
21 Israel...................................4.98
22 Germany .............................4.90
304
23 Thailand ..............................4.84
24 Japan ..................................4.77
25 Belgium ..............................4.77
26 United Kingdom..................4.77
27 Morocco .............................4.75
28 Austria ................................4.66
29 Turkey .................................4.64
30 Czech Republic ...................4.64
31 Indonesia ............................4.59
32 Hungary ..............................4.53
33 Bangladesh .........................4.41
34 China ..................................4.39
35 United States .....................4.32
36 Egypt ..................................4.25
37 Italy .....................................4.13
38 Philippines ..........................4.10
39 Korea, Rep..........................4.05
40 Pakistan ..............................4.05
41 Kuwait.................................4.04
42 Panama...............................4.02
43 Nigeria ................................3.99
44 Vietnam ..............................3.92
45 Slovak Republic ..................3.85
46 Ireland.................................3.80
47 Mexico................................3.79
48 Venezuela ...........................3.75
49 Romania ..............................3.74
50 Chile ...................................3.69
51 Argentina ............................3.62
52 Spain...................................3.52
53 Colombia ............................3.47
54 Peru ....................................3.42
55 Russian Federation .............3.32
56 Kazakhstan .........................3.28
57 Ukraine................................2.74
SOURCE: World Economic Forum, Executive Opinion Survey
1.14
Property rights
How would you rate the protection of property rights, including
financial assets, in your country? [1 = very weak; 7 = very strong] |
2009–10 weighted average
7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.79 7
1 Switzerland .........................6.41
2 Finland ................................6.41
3 Singapore ...........................6.34
4 Hong Kong SAR..................6.29
5 Sweden ..............................6.28
6 Austria ................................6.15
7 Germany .............................6.12
8 Norway ...............................6.07
9 Canada................................6.06
10 Denmark.............................6.03
11 Ireland.................................5.89
12 Australia..............................5.87
13 Netherlands ........................5.84
14 France.................................5.83
15 United Kingdom..................5.75
16 Bahrain ...............................5.62
17 Japan ..................................5.58
18 Belgium ..............................5.45
19 Saudi Arabia........................5.42
20 South Africa........................5.40
21 Jordan.................................5.40
22 Chile ...................................5.21
23 China...................................5.11
24 United States......................5.10
25 Malaysia..............................5.09
26 United Arab Emirates .........5.03
27 Spain...................................4.92
28 Kuwait.................................4.92
29 Israel...................................4.75
30 Panama ...............................4.74
31 Korea, Rep..........................4.71
32 Egypt ..................................4.63
33 Poland.................................4.59
34 India....................................4.54
35 Morocco .............................4.42
36 Czech Republic ...................4.39
37 Hungary ..............................4.36
38 Italy.....................................4.30
39 Brazil...................................4.27
40 Slovak Republic ..................4.25
41 Romania..............................4.17
42 Vietnam ..............................4.08
43 Turkey .................................4.05
44 Indonesia ............................4.04
45 Mexico................................3.93
46 Thailand ..............................3.91
47 Colombia ............................3.84
48 Peru ....................................3.83
49 Philippines ..........................3.67
50 Pakistan ..............................3.57
51 Kazakhstan .........................3.47
52 Bangladesh .........................3.44
53 Nigeria ................................3.33
54 Russian Federation .............2.94
55 Argentina ............................2.65
56 Ukraine ...............................2.60
57 Venezuela............................1.75
SOURCE: World Economic Forum, Executive Opinion Survey
1.15
Intellectual property protection
How would you rate intellectual property protection, including
anti-counterfeiting measures, in your country? [1 = very weak; 7 =
very strong] | 2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.21
1 Sweden ..............................6.23
2 Finland ................................6.16
3 Singapore............................6.12
4 Switzerland .........................6.01
5 France.................................5.86
6 Germany .............................5.75
7 Netherlands ........................5.68
8 Austria ................................5.68
9 Denmark.............................5.67
10 Canada................................5.63
11 Australia..............................5.63
12 Ireland.................................5.60
13 Norway ...............................5.59
14 United Kingdom..................5.50
15 Hong Kong SAR..................5.35
16 United Arab Emirates .........5.30
17 Japan ..................................5.22
18 Bahrain................................5.17
19 Belgium ..............................5.12
20 United States......................5.11
21 South Africa........................4.92
22 Saudi Arabia........................4.80
23 Malaysia..............................4.67
24 Jordan.................................4.41
25 Spain...................................4.26
26 Israel...................................4.20
27 Korea, Rep. .........................4.13
28 Kuwait .................................4.10
29 Panama...............................4.03
30 China ..................................3.99
31 Hungary ..............................3.96
32 Czech Republic ...................3.94
33 Slovak Republic ..................3.80
34 Indonesia ............................3.78
35 Chile ...................................3.73
36 Poland.................................3.72
37 Italy.....................................3.66
38 India....................................3.58
39 Egypt ..................................3.58
40 Morocco .............................3.39
41 Romania..............................3.17
42 Thailand...............................3.11
43 Mexico ................................3.10
44 Pakistan ..............................3.10
45 Brazil...................................3.06
46 Colombia ............................2.95
47 Nigeria ................................2.88
48 Kazakhstan .........................2.85
49 Philippines ..........................2.78
50 Vietnam ..............................2.70
51 Ukraine ...............................2.64
52 Turkey .................................2.59
53 Russian Federation .............2.58
54 Bangladesh .........................2.56
55 Peru ....................................2.56
56 Argentina ............................2.49
57 Venezuela............................1.92
SOURCE: World Economic Forum, Executive Opinion Survey
1.16
3: Data Tables | Institutional environment
Diversion of public funds
In your country, how common is diversion of public funds to
companies, individuals, or groups due to corruption? [1 = very
common; 7 = never occurs] | 2009–10 weighted average
7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.08 7
1 Sweden ..............................6.48
2 Singapore ...........................6.43
3 Denmark.............................6.36
4 Finland ................................6.30
5 Switzerland .........................6.11
6 Hong Kong SAR..................5.99
7 Norway ...............................5.94
8 Netherlands ........................5.90
9 United Kingdom..................5.81
10 Australia..............................5.79
11 Germany .............................5.75
12 Canada................................5.67
13 Austria ................................5.67
14 Ireland.................................5.34
15 Bahrain ...............................5.31
16 Israel...................................5.29
17 France.................................5.20
18 United Arab Emirates .........5.18
19 Japan ..................................5.16
20 Saudi Arabia........................5.12
21 Belgium ..............................5.06
22 United States .....................4.69
305
23 Chile ...................................4.63
24 Jordan.................................4.26
25 Poland .................................4.17
26 Malaysia ..............................4.11
27 Spain...................................3.97
28 China...................................3.76
29 Korea, Rep..........................3.68
30 Kuwait.................................3.61
31 Indonesia ............................3.54
32 Morocco .............................3.41
33 Thailand ..............................3.34
34 Vietnam ..............................3.30
35 India....................................3.25
36 Panama...............................3.21
37 Turkey .................................3.20
38 Italy .....................................3.15
39 South Africa ........................3.12
40 Egypt...................................3.11
41 Romania .............................3.08
42 Peru ....................................3.07
43 Pakistan ..............................2.95
44 Kazakhstan .........................2.81
45 Mexico................................2.80
46 Hungary ..............................2.73
47 Czech Republic ...................2.72
48 Colombia ............................2.64
49 Bangladesh .........................2.62
50 Russian Federation .............2.61
51 Slovak Republic ..................2.53
52 Brazil...................................2.33
53 Nigeria ................................2.23
54 Ukraine ...............................2.17
55 Argentina ............................2.07
56 Philippines ..........................2.00
57 Venezuela............................1.94
SOURCE: World Economic Forum, Executive Opinion Survey
 3: Data Tables | Institutional environment
1.17
Public trust of politicians
How would you rate the level of public trust in the ethical standards
of politicians in your country? [1 = very low; 7 = very high] | 2009–10
weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.28
1 Singapore ...........................6.42
2 Sweden ..............................5.82
3 Norway ...............................5.60
4 United Arab Emirates .........5.59
5 Saudi Arabia........................5.44
6 Denmark.............................5.42
7 Switzerland .........................5.20
8 Finland ................................5.08
9 Netherlands ........................5.01
10 Hong Kong SAR..................4.66
11 Australia..............................4.65
12 China ..................................4.26
13 Canada................................4.25
14 Bahrain ...............................4.07
15 Austria ................................4.03
16 Germany .............................4.03
17 France.................................3.94
18 Vietnam ..............................3.91
19 Chile ...................................3.79
20 Malaysia..............................3.75
21 Israel...................................3.69
22 Egypt ..................................3.63
306
23 Jordan.................................3.54
24 Kuwait.................................3.41
25 Kazakhstan .........................3.38
26 Belgium ..............................3.37
27 Indonesia ............................3.33
28 United States .....................3.28
29 United Kingdom..................3.24
30 Japan ..................................3.15
31 Morocco .............................3.15
32 Ireland.................................3.00
33 Russian Federation .............2.90
34 Spain...................................2.65
35 Turkey .................................2.50
36 Poland.................................2.49
37 Thailand ..............................2.48
38 South Africa........................2.37
39 India....................................2.32
40 Pakistan ..............................2.28
41 Mexico................................2.18
42 Colombia.............................2.16
43 Panama ...............................2.12
44 Korea, Rep. .........................2.12
45 Italy.....................................2.04
46 Bangladesh .........................1.97
47 Romania ..............................1.97
48 Peru.....................................1.90
49 Czech Republic....................1.89
50 Ukraine................................1.86
51 Nigeria.................................1.78
52 Brazil ...................................1.77
53 Hungary ..............................1.75
54 Slovak Republic...................1.68
55 Philippines...........................1.64
56 Argentina.............................1.50
57 Venezuela............................1.48
SOURCE: World Economic Forum, Executive Opinion Survey
1.18
Corruption perceptions index
This is a composite index measuring the perceived levels of
corruption in a given country as determined by expert assessments
and opinion surveys. Higher scores indicate less extensive
corruption | 2009
7 RANK COUNTRY/ECONOMY SCORE
1 Denmark ...............................9.30
2 Singapore ..............................9.20
2 Sweden .................................9.20
4 Switzerland ...........................9.00
5 Finland...................................8.90
5 Netherlands...........................8.90
7 Australia ................................8.70
7 Canada ..................................8.70
9 Norway..................................8.60
10 Hong Kong SAR ....................8.20
11 Germany ...............................8.00
11 Ireland ...................................8.00
13 Austria....................................7.90
14 Japan .....................................7.70
14 United Kingdom.....................7.70
16 United States.........................7.50
17 Belgium ..................................7.10
18 France ...................................6.90
19 Chile ......................................6.70
20 United Arab Emirates............6.50
21 Israel......................................6.10
21 Spain .....................................6.10
23 Korea, Rep. ...........................5.50
24 Bahrain ..................................5.10
24 Hungary.................................5.10
26 Jordan ...................................5.00
26 Poland ...................................5.00
28 Czech Republic......................4.90
29 South Africa ..........................4.70
30 Malaysia ................................4.50
30 Slovak Republic .....................4.50
32 Turkey....................................4.40
33 Italy .......................................4.30
33 Saudi Arabia ..........................4.30
35 Kuwait ...................................4.10
36 Romania ................................3.80
37 Brazil .....................................3.70
37 Colombia ...............................3.70
37 Peru .......................................3.70
40 China .....................................3.60
41 India ......................................3.40
41 Panama .................................3.40
41 Thailand .................................3.40
44 Mexico ..................................3.30
44 Morocco................................3.30
46 Argentina...............................2.90
47 Egypt.....................................2.80
47 Indonesia...............................2.80
49 Kazakhstan ............................2.70
49 Vietnam .................................2.70
51 Nigeria...................................2.50
52 Bangladesh ...........................2.40
52 Pakistan.................................2.40
52 Philippines.............................2.40
55 Russian Federation................2.20
55 Ukraine..................................2.20
57 Venezuela ..............................1.90
SOURCE: Transparency International, Corruption Perceptions Index 2009
1.19 1.20

3: Data Tables | Institutional environment

Strength of legal rights index
This index measures the degree to which collateral and bankruptcy
laws protect the rights of borrowers and lenders and thus facilitate
lending. The index ranges from 0 to 10, with higher scores indicating
that collateral and bankruptcy laws are better designed to expand
access to credit | 2009
Central bank transparency
This index measures the degree of transparency that exists in a
central bank’s policy actions. The index ranges from 0 to 15, with
higher scores indicating that a central bank operates with greater
transparency | 2009

RANK COUNTRY/ECONOMY HARD DATA

RANK COUNTRY/ECONOMY SCORE
1 Sweden ...............................15.00
1 Hong Kong SAR ..................10.00
2 United Kingdom ..................12.50
1 Malaysia ..............................10.00
3 Austria..................................11.00
1 Singapore ............................10.00
3 Belgium................................11.00
4 Australia ................................9.00
3 Canada .................................11.00
4 Denmark ...............................9.00
3 Finland .................................11.00
4 Israel .....................................9.00
3 France ..................................11.00
4 Poland ...................................9.00
3 Germany ..............................11.00
4 Slovak Republic.....................9.00
3 Hungary ...............................11.00
4 South Africa ..........................9.00
3 Ireland ..................................11.00
4 Ukraine..................................9.00
3 Italy ......................................11.00
4 United Kingdom ....................9.00
3 Netherlands .........................11.00
12 India ......................................8.00
3 Spain ....................................11.00
12 Ireland ...................................8.00
14 Australia...............................10.50
12 Nigeria...................................8.00
15 Japan ...................................10.00
12 Romania ................................8.00
15 Poland..................................10.00
12 Switzerland ...........................8.00
15 United States ......................10.00
12 United States ........................8.00
18 Israel .....................................9.50
12 Vietnam.................................8.00
18 Philippines.............................9.50
19 Austria....................................7.00
18 South Africa ..........................9.50
19 Bangladesh ............................7.00
18 Switzerland............................9.50
19 Belgium..................................7.00
18 Turkey....................................9.50
19 Finland ...................................7.00 307
23 Brazil .....................................9.00
19 France ....................................7.00
23 Korea, Rep. ...........................9.00
19 Germany ................................7.00
25 Indonesia...............................8.00
19 Hungary .................................7.00
25 Norway .................................8.00
19 Japan .....................................7.00
25 Peru.......................................8.00
19 Korea, Rep. ............................7.00
25 Thailand.................................8.00
19 Norway ..................................7.00
29 Argentina ...............................7.50
19 Peru........................................7.00
29 Chile.......................................7.50
30 Canada ..................................6.00
29 Colombia................................7.50
30 China .....................................6.00
29 Denmark ................................7.50
30 Czech Republic......................6.00
33 Mexico ...................................7.00
30 Netherlands...........................6.00
33 Singapore...............................7.00
30 Pakistan.................................6.00
35 Romania ................................6.50
30 Panama .................................6.00
36 Malaysia ................................6.00
30 Spain .....................................6.00
36 Slovak Republic.....................6.00
37 Colombia ...............................5.00
38 Kazakhstan ............................5.50
37 Kazakhstan............................5.00
39 China .....................................4.50
37 Sweden .................................5.00
40 Nigeria...................................4.00
40 Argentina...............................4.00
40 Ukraine..................................4.00
40 Bahrain ..................................4.00
42 Bahrain ..................................3.50
40 Chile ......................................4.00
42 Pakistan.................................3.50
40 Jordan ...................................4.00
44 Russian Federation ...............3.00
40 Kuwait ...................................4.00
45 Egypt.....................................2.50
40 Mexico ..................................4.00
46 India ......................................2.00
40 Saudi Arabia ..........................4.00
46 Jordan ...................................2.00
40 Thailand.................................4.00
46 Kuwait ...................................2.00
40 Turkey....................................4.00
46 United Arab Emirates............2.00
40 United Arab Emirates............4.00
50 Saudi Arabia...........................1.00
50 Brazil .....................................3.00
n/a Bangladesh..............................n/a
50 Egypt.....................................3.00
n/a Czech Republic........................n/a
50 Indonesia...............................3.00
n/a Hong Kong SAR ......................n/a
50 Italy .......................................3.00
n/a Morocco ..................................n/a
50 Morocco................................3.00
n/a Panama....................................n/a
50 Philippines.............................3.00
n/a Venezuela ................................n/a
50 Russian Federation ...............3.00
n/a Vietnam ...................................n/a
57 Venezuela..............................2.00

SOURCE: Pierre L. Siklos. 2010. “Central Bank Transparency: An Updated

SOURCE: The World Bank, Doing Business 2010 Look.” Applied Economics Letters (forthcoming)
 3: Data Tables | Institutional environment
1.21
Effectiveness of law-making bodies
How effective is your national parliament/congress as a law-making
institution? [1 = very ineffective; 7 = very effective—among the best
in the world] | 2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.79
1 Singapore ...........................6.49
2 Sweden ..............................5.88
3 Australia..............................5.66
4 Finland ................................5.48
5 Denmark.............................5.39
6 Norway ...............................5.24
7 Canada ................................5.11
8 United Kingdom..................5.06
9 France.................................5.05
10 Switzerland .........................4.96
11 Germany .............................4.95
12 Malaysia..............................4.63
13 United Arab Emirates .........4.62
14 Netherlands ........................4.60
15 Saudi Arabia........................4.53
16 Austria ................................4.43
17 South Africa........................4.42
18 China ..................................4.41
19 Japan ..................................4.40
20 Israel...................................4.32
21 India....................................4.30
22 Hong Kong SAR..................4.17
308
23 Vietnam ..............................4.15
24 Ireland.................................4.02
25 United States .....................3.98
26 Chile ...................................3.96
27 Turkey .................................3.95
28 Egypt ..................................3.77
29 Kazakhstan .........................3.71
30 Morocco .............................3.68
31 Bahrain ...............................3.68
32 Indonesia ............................3.60
33 Spain...................................3.51
34 Thailand ..............................3.36
35 Belgium ..............................3.33
36 Nigeria ................................3.29
37 Kuwait.................................3.29
38 Russian Federation .............3.29
39 Poland.................................3.26
40 Czech Republic ...................3.07
41 Slovak Republic ..................3.03
42 Bangladesh .........................3.03
43 Italy.....................................2.99
44 Jordan.................................2.92
45 Pakistan ..............................2.86
46 Hungary ..............................2.86
47 Romania .............................2.85
48 Colombia ............................2.79
49 Philippines ..........................2.52
50 Mexico................................2.48
51 Panama...............................2.44
52 Brazil...................................2.44
53 Argentina ............................2.21
54 Korea, Rep. .........................2.18
55 Ukraine ...............................2.03
56 Peru.....................................1.86
57 Venezuela............................1.57
SOURCE: World Economic Forum, Executive Opinion Survey
1.22
Judicial independence
To what extent is the judiciary in your country independent from
influences of members of government, citizens, or firms? [1 = heavily
influenced; 7 = entirely independent] | 2009–10 weighted average
7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.47 7
1 Sweden ..............................6.56
2 Denmark.............................6.40
3 Switzerland .........................6.39
4 Germany .............................6.37
5 Finland ................................6.33
6 United Kingdom..................6.29
7 Australia..............................6.28
8 Ireland.................................6.25
9 Canada................................6.24
10 Netherlands ........................6.23
11 Norway ...............................6.22
12 Israel...................................6.21
13 Hong Kong SAR..................6.15
14 Austria ................................5.77
15 Japan ..................................5.70
16 Singapore ...........................5.64
17 Chile ...................................5.36
18 Belgium ..............................5.20
19 Saudi Arabia........................5.20
20 Bahrain ...............................5.04
21 United States .....................4.97
22 Kuwait.................................4.93
23 United Arab Emirates .........4.89
24 France.................................4.79
25 India....................................4.77
26 South Africa........................4.70
27 Jordan.................................4.61
28 Malaysia..............................4.34
29 Poland.................................4.33
30 Thailand ..............................4.32
31 Hungary ..............................4.04
32 Korea, Rep..........................3.99
33 Czech Republic ...................3.97
34 China ..................................3.97
35 Egypt ..................................3.91
36 Vietnam ..............................3.87
37 Spain...................................3.82
38 Indonesia ............................3.80
39 Pakistan ..............................3.55
40 Brazil...................................3.52
41 Colombia ............................3.48
42 Morocco .............................3.48
43 Nigeria ................................3.48
44 Italy.....................................3.48
45 Romania .............................3.47
46 Turkey .................................3.40
47 Bangladesh .........................3.39
48 Mexico................................3.22
49 Slovak Republic ..................2.90
50 Kazakhstan .........................2.86
51 Philippines ..........................2.84
52 Russian Federation .............2.72
53 Peru ....................................2.61
54 Argentina ............................2.56
55 Panama...............................2.51
56 Ukraine ...............................2.00
57 Venezuela............................1.69
SOURCE: World Economic Forum, Executive Opinion Survey
1.23
Irregular payments in judicial decisions
In your country, how common is it for firms to make undocumented
extra payments or bribes connected with obtaining favorable judicial
decisions? [1 = very common; 7 = never occurs] | 2009–10 weighted
average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.72
1 Sweden...............................6.76
2 Finland ................................6.71
3 Singapore ...........................6.69
4 Denmark.............................6.61
5 Norway ...............................6.53
6 Hong Kong SAR..................6.52
7 Switzerland .........................6.52
8 Canada................................6.46
9 Germany .............................6.45
10 Israel...................................6.37
11 Japan ..................................6.36
12 Ireland.................................6.36
13 Austria ................................6.33
14 Netherlands ........................6.31
15 Australia..............................6.23
16 United Kingdom..................6.23
17 Belgium ..............................5.87
18 Saudi Arabia........................5.84
19 United Arab Emirates .........5.84
20 France.................................5.82
21 Chile ...................................5.49
22 Bahrain ...............................5.47
23 South Africa........................5.30
24 Kuwait.................................5.26
25 Spain...................................5.20
26 Jordan.................................5.14
27 United States .....................4.97
28 Egypt ..................................4.95
29 Poland.................................4.88
30 Hungary ..............................4.51
31 India....................................4.46
32 Malaysia..............................4.40
33 Thailand ..............................4.40
34 Korea, Rep..........................4.24
35 Italy.....................................4.00
36 Romania .............................3.99
37 Czech Republic ...................3.96
38 China ..................................3.96
39 Brazil...................................3.80
40 Turkey .................................3.60
41 Nigeria ................................3.46
42 Indonesia ............................3.35
43 Morocco .............................3.33
44 Colombia ............................3.26
45 Vietnam ..............................3.22
46 Pakistan ..............................3.20
47 Panama ...............................3.19
48 Bangladesh .........................3.17
49 Argentina ............................3.15
50 Russian Federation .............3.08
51 Mexico................................2.97
52 Kazakhstan .........................2.91
53 Slovak Republic ..................2.90
54 Philippines ..........................2.64
55 Peru ....................................2.41
56 Venezuela ...........................2.19
57 Ukraine................................1.87
SOURCE: World Economic Forum, Executive Opinion Survey
1.24
3: Data Tables | Institutional environment
Time to enforce a contract
This variable is the time in days to resolve a dispute related to a
contract | 2009
7 RANK COUNTRY/ECONOMY SCORE
1 Singapore ..........................150.00
2 Korea, Rep. .......................230.00
3 Hong Kong SAR ................280.00
3 Norway .............................280.00
5 Russian Federation ............281.00
6 Vietnam.............................295.00
7 United States ....................300.00
8 France................................331.00
9 Ukraine..............................345.00
10 Japan.................................360.00
11 Finland...............................375.00
12 Denmark ...........................380.00
13 Kazakhstan........................390.00
14 Germany ...........................394.00
15 Australia ............................395.00
15 Hungary ............................395.00
17 Austria................................397.00
18 United Kingdom ................399.00
19 China .................................406.00
20 Mexico ..............................415.00
21 Switzerland ........................417.00
22 Turkey................................420.00
309
23 Peru...................................428.00
24 Nigeria ...............................457.00
25 Thailand.............................479.00
26 Chile ..................................480.00
27 Belgium.............................505.00
28 Sweden .............................508.00
29 Venezuela ..........................510.00
30 Romania ............................512.00
31 Netherlands.......................514.00
32 Ireland ...............................515.00
32 Spain .................................515.00
34 United Arab Emirates ........537.00
35 Slovak Republic.................565.00
36 Kuwait ...............................566.00
37 Canada ..............................570.00
37 Indonesia...........................570.00
39 Malaysia ............................585.00
40 Argentina...........................590.00
41 South Africa ......................600.00
42 Czech Republic ..................611.00
43 Morocco ............................615.00
44 Brazil..................................616.00
45 Bahrain ..............................635.00
45 Saudi Arabia ......................635.00
47 Panama .............................686.00
48 Jordan ...............................689.00
49 Poland ...............................830.00
50 Philippines.........................842.00
51 Israel .................................890.00
52 Pakistan.............................976.00
53 Egypt ..............................1,010.00
54 Italy.................................1,210.00
55 Colombia ........................1,346.00
56 India ...............................1,420.00
57 Bangladesh ....................1,442.00
SOURCE: The World Bank, Doing Business 2010
 3: Data Tables | Institutional environment
1.25
Number of procedures to enforce a contract
This variable is the number of procedures from the moment the
plaintiff files a lawsuit in court until the moment of payment | 2009
RANK COUNTRY/ECONOMY SCORE
1 Ireland .................................20.00
2 Singapore ............................21.00
3 Hong Kong SAR ..................24.00
4 Austria.................................25.00
4 Belgium...............................25.00
4 Netherlands.........................25.00
7 Czech Republic ....................27.00
8 Australia ..............................28.00
9 France .................................29.00
9 Venezuela............................29.00
11 Germany .............................30.00
11 Japan...................................30.00
11 Malaysia ..............................30.00
11 Slovak Republic...................30.00
11 South Africa ........................30.00
11 Sweden ...............................30.00
11 Ukraine................................30.00
11 United Kingdom ..................30.00
19 Panama................................31.00
19 Romania ..............................31.00
19 Switzerland ..........................31.00
22 Finland.................................32.00
310
22 United States ......................32.00
24 Hungary ..............................33.00
24 Norway ...............................33.00
26 China ...................................34.00
26 Colombia .............................34.00
26 Denmark .............................34.00
26 Vietnam...............................34.00
30 Israel ...................................35.00
30 Korea, Rep. .........................35.00
30 Thailand...............................35.00
30 Turkey..................................35.00
34 Argentina.............................36.00
34 Canada ................................36.00
34 Chile ....................................36.00
37 Philippines ...........................37.00
37 Russian Federation ..............37.00
39 Jordan .................................38.00
39 Kazakhstan..........................38.00
39 Mexico ................................38.00
39 Poland .................................38.00
43 Indonesia.............................39.00
43 Nigeria.................................39.00
43 Spain ...................................39.00
46 Italy .....................................40.00
46 Morocco..............................40.00
48 Bangladesh ..........................41.00
48 Egypt ...................................41.00
48 Peru .....................................41.00
51 Saudi Arabia ........................43.00
52 Brazil ...................................45.00
53 India ....................................46.00
54 Pakistan ...............................47.00
55 Bahrain ................................48.00
56 United Arab Emirates..........49.00
57 Kuwait .................................50.00
SOURCE: The World Bank, Doing Business 2010
1.26
Strength of investor protection index
This index assesses the strength of investor protection on a 0-to-10
(best) scale | 2009
RANK COUNTRY/ECONOMY SCORE
1 Singapore ..............................9.30
2 Hong Kong SAR ....................9.00
3 Malaysia ................................8.70
4 Canada ..................................8.30
4 Colombia ...............................8.30
4 Ireland ...................................8.30
4 Israel .....................................8.30
4 United States ........................8.30
9 South Africa ..........................8.00
9 United Kingdom ....................8.00
11 Thailand..................................7.70
12 Belgium..................................7.00
12 Japan .....................................7.00
12 Saudi Arabia ...........................7.00
15 Bangladesh ...........................6.70
15 Norway..................................6.70
15 Peru .......................................6.70
18 Denmark ...............................6.30
18 Kuwait ...................................6.30
18 Pakistan.................................6.30
21 Chile ......................................6.00
21 India ......................................6.00
21 Indonesia...............................6.00
21 Mexico ..................................6.00
21 Poland ...................................6.00
21 Romania ................................6.00
27 Australia ................................5.70
27 Bahrain ..................................5.70
27 Finland...................................5.70
27 Italy .......................................5.70
27 Kazakhstan ............................5.70
27 Nigeria...................................5.70
27 Sweden .................................5.70
27 Turkey....................................5.70
35 Brazil .....................................5.30
35 Egypt.....................................5.30
35 France ...................................5.30
35 Korea, Rep. ...........................5.30
39 China .....................................5.00
39 Czech Republic......................5.00
39 Germany ...............................5.00
39 Russian Federation ...............5.00
39 Spain .....................................5.00
44 Argentina...............................4.70
44 Netherlands...........................4.70
44 Panama .................................4.70
44 Slovak Republic .....................4.70
44 Ukraine..................................4.70
49 Hungary ................................4.30
49 Jordan ...................................4.30
49 United Arab Emirates............4.30
52 Austria...................................4.00
52 Philippines.............................4.00
54 Morocco................................3.00
54 Switzerland ...........................3.00
56 Vietnam .................................2.70
57 Venezuela ..............................2.30
SOURCE: The World Bank, Doing Business 2010
1.27

3: Data Tables | Institutional environment

Cost of enforcing contracts
This variable is the cost of enforcing contracts as a percentage of
legal claim | 2009

RANK COUNTRY/ECONOMY SCORE

1 Norway..................................9.90
2 Korea, Rep...........................10.30
3 Finland .................................10.40
4 China ....................................11.10
5 Poland .................................12.00
6 Thailand ...............................12.30
7 Hungary...............................13.00
8 Russian Federation..............13.40
9 Germany..............................14.40
9 United States ......................14.40
11 Bahrain ................................14.70
12 Argentina.............................16.50
12 Brazil....................................16.50
14 Belgium ...............................16.60
15 Spain ....................................17.20
16 France ..................................17.40
17 Austria .................................18.00
18 Kuwait .................................18.80
18 Turkey ..................................18.80
20 Hong Kong SAR ..................19.50
21 Australia ..............................20.70
22 Kazakhstan..........................22.00
311
23 Canada ................................22.30
24 Japan...................................22.70
25 Denmark .............................23.30
26 United Kingdom ..................23.40
27 Pakistan...............................23.80
28 Switzerland .........................24.00
29 Netherlands.........................24.40
30 Morocco..............................25.20
31 Israel ...................................25.30
32 Singapore ............................25.80
33 Philippines...........................26.00
34 Egypt...................................26.20
34 United Arab Emirates..........26.20
36 Ireland .................................26.90
37 Malaysia ...............................27.50
37 Saudi Arabia .........................27.50
39 Vietnam ...............................28.50
40 Chile ....................................28.60
41 Romania ..............................28.90
42 Italy .....................................29.90
43 Slovak Republic...................30.00
44 Jordan..................................31.20
44 Sweden ...............................31.20
46 Mexico ................................32.00
46 Nigeria.................................32.00
48 Czech Republic....................33.00
49 South Africa ........................33.20
50 Peru .....................................35.70
51 India ....................................39.60
52 Ukraine ................................41.50
53 Venezuela ............................43.70
54 Panama ...............................50.00
55 Colombia .............................52.60
56 Bangladesh .........................63.30
57 Indonesia...........................122.70

SOURCE: The World Bank, Doing Business 2010

Data Tables

Section II
Business environment
 3: Data Tables | Business environment
2.01
Quality of management schools
How would you assess the quality of management or business
schools in your country? [1 = poor; 7 = excellent—among the best in
the world] | 2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.62
1 Switzerland .........................6.07
2 Canada................................5.97
3 Belgium ..............................5.96
4 France .................................5.74
5 Singapore ...........................5.65
6 Sweden ..............................5.63
7 Spain...................................5.62
8 United Kingdom..................5.54
9 United States .....................5.52
10 Netherlands ........................5.49
11 Denmark.............................5.41
12 Chile ...................................5.34
13 Argentina ............................5.29
14 Australia..............................5.29
15 Finland ................................5.28
16 Norway ...............................5.23
17 South Africa ........................5.12
18 India....................................5.08
19 Hong Kong SAR..................5.07
20 Ireland.................................5.02
21 United Arab Emirates .........4.97
22 Germany .............................4.93
314
23 Austria ................................4.91
24 Malaysia..............................4.75
25 Italy.....................................4.68
26 Peru ....................................4.61
27 Bahrain ...............................4.56
28 Israel...................................4.55
29 Korea, Rep..........................4.53
30 Morocco .............................4.52
31 Mexico................................4.48
32 Indonesia ............................4.43
33 Czech Republic ...................4.43
34 Venezuela ...........................4.39
35 Thailand ..............................4.35
36 Colombia ............................4.34
37 Saudi Arabia........................4.33
38 Philippines ..........................4.29
39 Poland.................................4.23
40 China ..................................4.20
41 Japan ..................................4.17
42 Hungary ..............................4.12
43 Brazil...................................4.07
44 Pakistan ..............................3.96
45 Jordan.................................3.94
46 Bangladesh .........................3.83
47 Russian Federation .............3.75
48 Kuwait.................................3.71
49 Romania .............................3.68
50 Nigeria ................................3.67
51 Kazakhstan .........................3.60
52 Turkey .................................3.58
53 Vietnam ..............................3.50
54 Ukraine ...............................3.49
55 Panama...............................3.49
56 Slovak Republic ..................3.45
57 Egypt ..................................3.26
SOURCE: World Economic Forum, Executive Opinion Survey
2.02
Quality of math and science education
How would you assess the quality of math and science education in
your country’s schools? [1 = poor; 7 = excellent—among the best in
the world] | 2009–10 weighted average
7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.22 7
1 Singapore ...........................6.46
2 Belgium ..............................6.18
3 Finland ................................6.16
4 Switzerland .........................5.78
5 Canada................................5.44
6 France.................................5.36
7 Hong Kong SAR..................5.35
8 Netherlands ........................5.22
9 Korea, Rep. .........................5.12
10 Denmark.............................5.05
11 Sweden ..............................5.04
12 Australia..............................4.91
13 Czech Republic ...................4.90
14 United Arab Emirates .........4.89
15 Japan ..................................4.86
16 Hungary ..............................4.82
17 Malaysia..............................4.79
18 China ...................................4.74
19 Ireland.................................4.73
20 Austria ................................4.69
21 India....................................4.67
22 Germany .............................4.66
23 Poland.................................4.61
24 Ukraine ...............................4.59
25 Romania .............................4.58
26 Bahrain ...............................4.52
27 Indonesia ............................4.49
28 Saudi Arabia........................4.47
29 Vietnam ..............................4.45
30 United States .....................4.43
31 Jordan.................................4.42
32 Russian Federation .............4.42
33 United Kingdom..................4.41
34 Thailand ..............................4.27
35 Norway ...............................4.11
36 Slovak Republic...................4.11
37 Morocco .............................4.01
38 Kazakhstan .........................3.77
39 Italy.....................................3.64
40 Kuwait.................................3.54
41 Pakistan ..............................3.54
42 Colombia ............................3.51
43 Israel...................................3.50
44 Turkey .................................3.42
45 Bangladesh .........................3.23
46 Argentina ............................3.18
47 Philippines...........................3.11
48 Spain...................................3.07
49 Venezuela ...........................2.89
50 Nigeria ................................2.86
51 Chile....................................2.76
52 Egypt ..................................2.70
53 Brazil...................................2.67
54 Mexico................................2.57
55 Panama...............................2.57
56 Peru ....................................2.45
57 South Africa........................2.00
SOURCE: World Economic Forum, Executive Opinion Survey
2.03
Extent of staff training
To what extent do companies in your country invest in training and
employee development? [1 = hardly at all; 7 = to a great extent] |
2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.34
1 Sweden ..............................5.70
2 Switzerland .........................5.51
3 Norway ...............................5.47
4 Singapore ...........................5.45
5 Japan ..................................5.42
6 Denmark.............................5.40
7 Germany .............................5.24
8 Finland ................................5.23
9 United States .....................5.09
10 Netherlands ........................5.09
11 Canada................................4.98
12 Malaysia..............................4.97
13 Austria ................................4.93
14 Belgium ..............................4.92
15 Bahrain ...............................4.88
16 Australia..............................4.77
17 Ireland.................................4.75
18 Israel...................................4.72
19 South Africa........................4.72
20 Hong Kong SAR..................4.71
21 United Kingdom..................4.70
22 United Arab Emirates .........4.66
23 France.................................4.65
24 Chile ...................................4.41
25 Saudi Arabia........................4.41
26 Indonesia ............................4.39
27 Czech Republic ...................4.37
28 Korea, Rep..........................4.36
29 Philippines ..........................4.28
30 Panama...............................4.24
31 Poland.................................4.22
32 Brazil ...................................4.19
33 China...................................4.12
34 Vietnam...............................4.11
35 India ....................................4.10
36 Thailand ..............................4.07
37 Romania .............................3.90
38 Nigeria ................................3.90
39 Slovak Republic ..................3.89
40 Peru ....................................3.83
41 Argentina ............................3.81
42 Mexico................................3.75
43 Turkey..................................3.74
44 Morocco .............................3.71
45 Hungary ..............................3.70
46 Spain...................................3.69
47 Russian Federation .............3.68
48 Venezuela ...........................3.67
49 Kuwait.................................3.60
50 Kazakhstan .........................3.59
51 Colombia ............................3.57
52 Jordan.................................3.55
53 Ukraine ...............................3.40
54 Egypt ..................................3.35
55 Pakistan ..............................3.32
56 Italy .....................................3.16
57 Bangladesh .........................3.12
SOURCE: World Economic Forum, Executive Opinion Survey
2.04
3: Data Tables | Business environment
Local availability of specialized research and
training services
In your country, to what extent are high-quality, specialized training
services available? [1 = not available; 7 = widely available] | 2009–10
weighted average
7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.74 7
1 Switzerland .........................6.47
2 Germany .............................6.21
3 Sweden...............................6.11
4 Netherlands ........................6.02
5 France.................................5.89
6 Austria ................................5.89
7 Finland ................................5.81
8 Denmark.............................5.80
9 Belgium ..............................5.79
10 United States......................5.76
11 Canada................................5.69
12 United Kingdom..................5.67
13 Japan ..................................5.55
14 Norway ...............................5.49
15 Hong Kong SAR..................5.42
16 Czech Republic ...................5.36
17 Singapore ...........................5.27
18 Australia..............................5.26
19 Poland.................................5.09
20 United Arab Emirates .........5.08
21 Ireland.................................5.05
22 Malaysia..............................5.02
315
23 Spain ...................................5.01
24 Israel...................................4.88
25 Chile ...................................4.86
26 Saudi Arabia........................4.70
27 Brazil...................................4.67
28 Italy.....................................4.67
29 Korea, Rep..........................4.60
30 Slovak Republic ..................4.56
31 Argentina ............................4.53
32 Hungary ..............................4.43
33 Jordan.................................4.42
34 South Africa........................4.41
35 China ..................................4.41
36 India....................................4.39
37 Indonesia ............................4.39
38 Mexico................................4.30
39 Turkey .................................4.24
40 Morocco .............................4.23
41 Panama...............................4.18
42 Egypt ..................................4.15
43 Colombia.............................4.12
44 Russian Federation .............4.09
45 Thailand ..............................4.08
46 Peru.....................................4.01
47 Kuwait.................................3.98
48 Kazakhstan .........................3.97
49 Philippines ..........................3.95
50 Bahrain ...............................3.92
51 Ukraine ...............................3.89
52 Nigeria ................................3.72
53 Romania .............................3.54
54 Pakistan ..............................3.52
55 Vietnam ..............................3.42
56 Venezuela ...........................3.04
57 Bangladesh.........................3.00
SOURCE: World Economic Forum, Executive Opinion Survey
 3: Data Tables | Business environment
2.05
Brain drain and ease of hiring foreign labor
This variable is the average of the results to two questions in the
Executive Opinion Survey: Does your country retain and attract
talented people? [1 = no, the best and brightest normally leave to
pursue opportunities in other countries; 7 = yes, there are many
opportunities for talented people within the country]; To what extent
does labor regulation in your country limit the ability to hire foreign
labor? [1 = very much limits hiring foreign labor; 7 = does not limit
hiring foreign labor at all] | 2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.11
1 Switzerland .........................5.71
2 United Arab Emirates .........5.67
3 Singapore ...........................5.45
4 United States......................5.11
5 Hong Kong SAR..................5.05
6 Ireland.................................4.99
7 United Kingdom..................4.95
8 Netherlands ........................4.91
9 Chile ...................................4.85
10 Sweden ..............................4.82
11 Bahrain ...............................4.79
12 Saudi Arabia ........................4.76
13 Norway ...............................4.74
14 Finland ................................4.65
15 Canada................................4.63
16 China ..................................4.61
17 Belgium ..............................4.59
18 Denmark.............................4.58
316 19 Indonesia ............................4.54
20 Kuwait.................................4.51
21 Malaysia..............................4.29
22 Germany .............................4.23
23 Korea, Rep..........................4.22
24 Australia..............................4.20
25 Japan ..................................4.11
26 Thailand...............................4.10
27 Peru ....................................4.08
28 France.................................3.96
29 India....................................3.95
30 Austria ................................3.94
31 Spain...................................3.94
32 Czech Republic ...................3.92
33 Brazil...................................3.92
34 Argentina ............................3.89
35 Nigeria ................................3.88
36 Panama...............................3.88
37 Hungary ..............................3.88
38 Vietnam ..............................3.84
39 Morocco .............................3.77
40 Israel ...................................3.76
41 Pakistan ..............................3.65
42 Slovak Republic ..................3.61
43 Romania .............................3.61
44 Italy.....................................3.57
45 Colombia ............................3.50
46 Mexico................................3.49
47 Poland.................................3.43
48 Jordan.................................3.41
49 Kazakhstan .........................3.39
50 Turkey .................................3.37
51 Ukraine ...............................3.34
52 Philippines ..........................3.28
53 Russian Federation .............3.22
54 Egypt ..................................3.15
55 Bangladesh .........................3.09
56 South Africa........................2.99
57 Venezuela ...........................2.50
SOURCE: World Economic Forum, Executive Opinion Survey
2.06
Tertiary enrollment
This variable is the gross tertiary enrollment rate | 2007 or most
recent available
RANK COUNTRY/ECONOMY SCORE
1 Korea, Rep. .........................94.67
2 Finland.................................93.81
3 United States.......................81.68
4 Denmark .............................80.30
7 5 Ukraine5...............................79.44
6 Venezuela5 ...........................78.10
7 Norway................................76.24
8 Sweden ...............................75.18
9 Australia ..............................75.06
10 Russian Federation ..............74.72
11 Hungary...............................69.10
12 Spain ...................................68.91
13 Italy......................................68.12
14 Argentina..............................67.13
15 Poland .................................66.95
16 Belgium ...............................62.48
17 Canada2 ...............................62.36
18 Ireland..................................61.06
19 Israel ...................................60.41
20 Netherlands.........................60.32
21 Singapore5 ...........................59.80
22 United Kingdom ..................59.10
23 Romania ..............................58.27
24 Japan...................................58.06
25 France .................................55.57
26 Czech Republic....................54.82
27 Austria .................................51.07
28 Slovak Republic ...................50.85
29 Chile5 ...................................49.80
30 Thailand5 ..............................48.26
31 Switzerland ..........................47.00
32 Panama ...............................45.03
33 Germany4 ............................43.60
34 Kazakhstan6 .........................41.05
35 Jordan .................................39.91
36 Turkey..................................36.30
37 Colombia .............................35.36
38 Peru4 ....................................35.06
39 Egypt3..................................34.75
40 Hong Kong SAR ..................33.84
41 Bahrain4 ...............................32.05
42 Malaysia4 .............................30.24
43 Brazil ...................................29.99
44 Saudi Arabia5 .......................29.85
45 Philippines4..........................28.47
46 Mexico ................................26.93
47 China ...................................22.89
48 United Arab Emirates5 ........22.85
49 Kuwait4 .................................17.57
50 Indonesia..............................17.46
51 South Africa4 .......................15.41
52 India.....................................13.48
53 Morocco5 .............................12.29
54 Nigeria3 ................................10.15
55 Vietnam1 ................................9.52
56 Bangladesh ............................7.25
57 Pakistan5................................5.18
SOURCES: UNESCO Institute for Statistics (retrieved August 24, 2010);
The World Bank, World Development Indicators 2010; national
sources
1 2 3 4 5 6
2001 2004 2005 2006 2008 2009
2.07
Irregular payments in tax collection
In your country, how common is it for firms to make undocumented
extra payments or bribes connected with annual tax payments? [1 =
very common; 7 = never occurs] | 2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 5.07
1 Sweden ..............................6.79
2 Singapore ...........................6.71
3 Finland ................................6.68
4 Denmark.............................6.65
5 Norway ...............................6.62
6 Bahrain ...............................6.49
7 Hong Kong SAR..................6.47
8 Switzerland .........................6.45
9 Canada................................6.43
10 United Arab Emirates .........6.42
11 Japan ..................................6.32
12 Austria ................................6.31
13 Germany .............................6.31
14 Netherlands ........................6.22
15 Australia ..............................6.19
16 Ireland.................................6.14
17 Chile....................................6.14
18 United Kingdom..................6.06
19 Saudi Arabia........................6.03
20 France.................................6.02
21 Israel...................................6.02
22 Belgium ..............................5.75
23 South Africa........................5.73
24 Kuwait.................................5.62
25 Spain...................................5.55
26 Poland.................................5.48
27 Turkey .................................5.34
28 Peru ....................................5.27
29 United States......................5.12
30 Slovak Republic ..................5.08
31 Romania .............................5.07
32 Czech Republic ...................5.06
33 Malaysia..............................5.01
34 Korea, Rep..........................4.87
35 Hungary ..............................4.87
36 Jordan.................................4.65
37 Mexico................................4.56
38 Panama...............................4.47
39 Brazil ...................................4.19
40 Egypt ..................................4.15
41 China...................................4.15
42 Italy .....................................4.14
43 Thailand ..............................4.12
44 Colombia.............................4.01
45 India....................................3.95
46 Kazakhstan .........................3.92
47 Russian Federation .............3.90
48 Argentina ............................3.66
49 Morocco .............................3.62
50 Venezuela ...........................3.58
51 Indonesia ............................3.38
52 Ukraine ...............................3.24
53 Vietnam...............................3.11
54 Nigeria ................................3.04
55 Pakistan ..............................2.78
56 Philippines ..........................2.61
57 Bangladesh .........................2.28
SOURCE: World Economic Forum, Executive Opinion Survey
2.08
3: Data Tables | Business environment
Distortive effect of taxes and subsidies on
competition
In your country, government subsidies and tax breaks seriously
distort competition [1 = strongly agree; 7 = strongly disagree] |
2009–10 weighted average
7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.25 7
1 Singapore ...........................5.84
2 Hong Kong SAR..................5.67
3 Bahrain ...............................5.66
4 Saudi Arabia........................5.42
5 Chile ...................................5.41
6 United Arab Emirates .........5.40
7 Sweden...............................5.12
8 South Africa........................4.98
9 Denmark.............................4.91
10 Kuwait.................................4.89
11 Finland ................................4.88
12 Switzerland .........................4.82
13 Netherlands ........................4.81
14 Norway ...............................4.80
15 China ..................................4.62
16 Ireland.................................4.60
17 Australia..............................4.53
18 France.................................4.51
19 Peru ....................................4.50
20 Austria ................................4.47
21 United Kingdom..................4.44
22 Israel...................................4.41
317
23 Canada................................4.39
24 Egypt ..................................4.37
25 Belgium ..............................4.36
26 Indonesia ............................4.24
27 Bangladesh .........................4.19
28 Jordan.................................4.16
29 Malaysia..............................4.15
30 Japan ..................................4.15
31 Poland .................................4.10
32 Czech Republic ...................4.08
33 Philippines ..........................4.06
34 Morocco .............................4.04
35 Panama...............................4.04
36 Thailand ..............................4.04
37 India ....................................4.01
38 Pakistan ..............................3.97
39 Vietnam ..............................3.96
40 Korea, Rep..........................3.95
41 Brazil...................................3.92
42 Turkey .................................3.91
43 Nigeria ................................3.89
44 Italy.....................................3.82
45 Kazakhstan .........................3.82
46 United States .....................3.82
47 Mexico................................3.75
48 Germany .............................3.71
49 Colombia ............................3.55
50 Spain...................................3.55
51 Russian Federation .............3.53
52 Romania .............................3.53
53 Hungary ..............................3.50
54 Slovak Republic ..................3.45
55 Ukraine ...............................2.89
56 Venezuela ...........................2.35
57 Argentina ............................2.27
SOURCE: World Economic Forum, Executive Opinion Survey
 3: Data Tables | Business environment
2.09
Marginal tax variation
This is the variation between the top tax rate on corporate income
and the taxes and mandatory contributions paid by a prototypical
business as a percentage of commercial profits | 2010
RANK COUNTRY/ECONOMY SCORE
1 China .................................–24.60
2 Czech Republic ..................–19.50
3 Romania ............................–18.20
4 Ukraine ..............................–18.10
5 France.................................–17.30
6 Belgium .............................–16.20
7 Italy....................................–15.90
8 Bahrain ..............................–14.70
9 United Arab Emirates ........–14.10
10 Kuwait................................–10.70
11 Sweden .............................–10.30
12 Saudi Arabia ........................–9.90
13 Austria .................................–9.60
14 Brazil ....................................–7.30
15 Germany..............................–6.20
16 Egypt ...................................–5.60
17 Spain....................................–5.10
18 Finland.................................–3.60
19 Turkey ..................................–3.10
20 Poland..................................–2.90
21 Colombia .............................–0.90
22 Ireland ...................................0.40
318
23 Mexico...................................1.30
24 Singapore ..............................3.10
25 Argentina...............................5.60
26 Vietnam .................................5.80
27 Canada ...................................7.00
28 Switzerland ............................7.40
29 Morocco.................................7.80
30 Australia ................................9.00
31 Kazakhstan ..........................10.40
32 Norway ................................12.10
33 Jordan .................................12.60
34 Chile ....................................13.20
35 Japan...................................13.50
36 India.....................................15.80
37 United Kingdom ...................17.00
38 Indonesia..............................17.40
39 Peru .....................................19.00
40 Nigeria.................................20.30
41 Israel ...................................20.70
42 Denmark .............................22.80
43 United States ......................25.40
44 South Africa ........................25.60
n/a Bangladesh..............................n/a
n/a Hong Kong SAR ......................n/a
n/a Hungary...................................n/a
n/a Korea, Rep...............................n/a
n/a Malaysia ..................................n/a
n/a Netherlands.............................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Philippines ...............................n/a
n/a Russian Federation..................n/a
n/a Slovak Republic .......................n/a
n/a Thailand ...................................n/a
n/a Venezuela ................................n/a
SOURCES: Top tax rate data from the Heritage Foundation, 2010 Index of
Economic Freedom; profit tax data from The World Bank, Doing
Business 2010
2.10
Time to pay taxes
This is the time to prepare, file, and pay or withhold the corporate
income tax, the value-added tax, and social security contributions
(hours per year) | 2009
RANK COUNTRY/ECONOMY SCORE
1 United Arab Emirates..........12.00
2 Bahrain ................................36.00
3 Switzerland .........................63.00
4 Ireland .................................76.00
5 Saudi Arabia ........................79.00
6 Hong Kong SAR ..................80.00
7 Singapore ............................84.00
8 Norway ................................87.00
9 Jordan ................................101.00
10 Australia .............................107.00
11 United Kingdom.................110.00
12 Kuwait................................118.00
13 Canada...............................119.00
14 Sweden .............................122.00
15 France ...............................132.00
16 Denmark............................135.00
17 Malaysia ............................145.00
18 Belgium .............................156.00
19 Netherlands.......................164.00
20 Austria................................171.00
21 United States.....................187.00
22 Philippines .........................195.00
23 Germany............................196.00
24 South Africa ......................200.00
25 Romania ............................202.00
26 Colombia ...........................208.00
27 Spain .................................213.00
28 Turkey................................223.00
29 Israel .................................230.00
30 Finland...............................243.00
31 Korea, Rep. .......................250.00
32 Slovak Republic..................257.00
33 Thailand.............................264.00
34 Indonesia...........................266.00
35 India...................................271.00
35 Kazakhstan ........................271.00
37 Bangladesh .......................302.00
38 Chile ..................................316.00
39 Russian Federation ...........320.00
40 Hungary ............................330.00
41 Italy ...................................334.00
42 Japan.................................355.00
43 Morocco............................358.00
44 Peru...................................380.00
45 Poland ...............................395.00
46 Argentina...........................453.00
47 Egypt.................................480.00
48 Panama .............................482.00
49 China .................................504.00
50 Mexico ...............................517.00
51 Pakistan.............................560.00
52 Czech Republic..................613.00
53 Ukraine..............................736.00
54 Venezuela..........................864.00
55 Nigeria...............................938.00
56 Vietnam..........................1,050.00
57 Brazil ..............................2,600.00
SOURCE: The World Bank, Doing Business 2010
2.11
Quality of overall infrastructure
General infrastructure in your country is [1 = underdeveloped;
7 = extensive and efficient by international standards] | 2009–10
weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.80
1 Switzerland .........................6.76
2 Hong Kong SAR..................6.73
3 Singapore ...........................6.62
4 France.................................6.59
5 Austria ................................6.42
6 Sweden ..............................6.42
7 Finland ................................6.36
8 Germany .............................6.33
9 Denmark.............................6.32
10 United Arab Emirates .........6.20
11 Korea, Rep..........................6.02
12 Canada................................6.00
13 Japan ..................................5.99
14 Netherlands ........................5.92
15 Belgium ..............................5.82
16 Spain...................................5.79
17 United States .....................5.75
18 Chile ...................................5.71
19 Bahrain ...............................5.58
20 Malaysia..............................5.47
21 Saudi Arabia........................5.46
22 United Kingdom..................5.26
23 Australia..............................5.22
24 Jordan.................................5.22
25 Czech Republic ...................5.13
26 Norway ...............................5.12
27 Turkey .................................5.10
28 Kuwait.................................4.91
29 Thailand ..............................4.89
30 Israel...................................4.87
31 Hungary ..............................4.79
32 South Africa........................4.60
33 Slovak Republic ..................4.37
34 Panama...............................4.35
35 Egypt ..................................4.30
36 Ireland.................................4.20
37 Ukraine ...............................4.08
38 Morocco .............................4.07
39 China ..................................4.07
40 Italy.....................................4.04
41 Kazakhstan .........................3.99
42 Mexico................................3.90
43 Brazil...................................3.79
44 Indonesia ............................3.71
45 India....................................3.64
46 Peru ....................................3.64
47 Russian Federation .............3.61
48 Colombia ............................3.56
49 Pakistan ..............................3.49
50 Argentina ............................3.45
51 Poland.................................3.35
52 Philippines ..........................3.21
53 Venezuela ...........................3.14
54 Vietnam ..............................3.03
55 Bangladesh .........................2.74
56 Nigeria ................................2.42
57 Romania .............................2.36
SOURCE: World Economic Forum, Executive Opinion Survey
2.12
3: Data Tables | Business environment
Quality of telephone infrastructure
New telephone lines for your business are [1 = scarce and difficult to
obtain; 7 = widely available and highly reliable] | 2009–10 weighted
average
7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 6.19 7
1 Norway ...............................6.97
2 Hong Kong SAR..................6.93
3 Israel...................................6.91
4 Sweden ..............................6.87
5 Finland ................................6.86
6 Japan ..................................6.85
7 Switzerland .........................6.85
8 Singapore ...........................6.84
9 Austria ................................6.81
10 Chile....................................6.76
11 Denmark.............................6.75
12 France.................................6.75
13 Canada................................6.73
14 Korea, Rep..........................6.69
15 Slovak Republic ..................6.63
16 Netherlands ........................6.63
17 Hungary ..............................6.62
18 Egypt ..................................6.58
19 Jordan.................................6.57
20 Germany .............................6.55
21 United Arab Emirates .........6.54
22 Brazil...................................6.52
319
23 United Kingdom..................6.50
24 Belgium ..............................6.50
25 Czech Republic ...................6.45
26 United States .....................6.45
27 Bahrain ...............................6.42
28 Turkey .................................6.40
29 Peru ....................................6.39
30 Panama...............................6.35
31 India....................................6.32
32 Thailand ..............................6.30
33 Morocco .............................6.28
34 Colombia ............................6.25
35 Spain...................................6.16
36 China...................................6.12
37 Nigeria ................................6.08
38 Mexico................................6.07
39 Saudi Arabia........................6.06
40 Ireland.................................6.06
41 Malaysia..............................6.02
42 Poland.................................5.96
43 Vietnam ..............................5.96
44 Australia..............................5.90
45 Romania .............................5.73
46 Argentina ............................5.62
47 Philippines ..........................5.59
48 Ukraine ...............................5.50
49 Pakistan ..............................5.48
50 Italy.....................................5.46
51 Kuwait.................................5.37
52 Kazakhstan .........................5.33
53 Bangladesh .........................5.04
54 Indonesia ............................5.02
55 Russian Federation .............4.97
56 South Africa........................4.47
57 Venezuela ...........................4.32
SOURCE: World Economic Forum, Executive Opinion Survey
 3: Data Tables | Business environment
2.13
Internet users
This variable is Internet users per 100 inhabitants | 2008
RANK COUNTRY/ECONOMY SCORE
1 Sweden................................87.84
2 Netherlands.........................86.55
3 Denmark .............................83.89
4 Finland.................................82.62
5 Norway................................82.55
6 Switzerland ..........................77.00
7 Korea, Rep...........................76.50
8 United Kingdom ..................76.24
9 Canada ................................75.43
10 Japan...................................75.40
11 Germany .............................75.33
12 United States ......................74.00
13 Singapore ............................73.02
14 Australia...............................71.98
15 Austria .................................71.21
16 Belgium ...............................68.86
17 France .................................68.21
18 Hong Kong SAR...................67.00
19 Slovak Republic ...................66.05
20 United Arab Emirates ..........65.15
21 Ireland .................................62.54
22 Hungary ..............................58.66
320
23 Czech Republic....................58.41
24 Spain....................................56.74
25 Malaysia ..............................55.80
26 Bahrain.................................51.95
27 Israel ...................................49.64
28 Poland .................................49.02
29 Italy......................................41.93
30 Colombia .............................38.50
31 Brazil ....................................37.52
32 Turkey..................................34.37
33 Kuwait .................................34.26
34 Morocco..............................33.04
35 Chile ....................................32.47
36 Russian Federation .............32.00
37 Saudi Arabia ........................30.80
38 Romania ..............................29.00
39 Argentina .............................28.11
40 Panama ................................27.49
41 Jordan .................................26.00
42 Venezuela ............................25.49
43 Peru .....................................24.72
44 Vietnam ...............................23.92
45 Thailand ...............................23.89
46 China ...................................22.28
47 Mexico.................................21.71
48 Egypt ...................................16.65
49 Nigeria .................................15.86
50 Kazakhstan...........................11.00
51 Ukraine ................................10.60
52 Pakistan ...............................10.45
53 South Africa ..........................8.43
54 Indonesia ...............................7.92
55 Philippines.............................6.22
56 India ......................................4.38
57 Bangladesh ...........................0.35
SOURCES: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources
2.14
Broadband Internet subscribers
This variable is the total broadband Internet subscribers per 100
inhabitants | 2008
RANK COUNTRY/ECONOMY SCORE
1 Sweden................................41.19
2 Denmark ..............................37.12
3 Netherlands.........................35.14
4 Switzerland..........................34.15
5 Norway................................33.27
6 Korea, Rep...........................32.14
7 Finland.................................30.50
8 Canada ................................29.59
9 France .................................28.52
10 United Kingdom ..................28.21
11 Hong Kong SAR...................28.11
12 Belgium................................27.97
13 Germany ..............................27.47
14 Australia ..............................24.39
15 Israel ...................................23.88
16 Japan...................................23.65
17 United States ......................23.46
18 Singapore .............................21.74
19 Austria .................................20.74
20 Spain ...................................20.22
21 Ireland .................................20.09
22 Italy .....................................18.93
23 Hungary ...............................17.48
24 Czech Republic.....................17.05
25 Bahrain ................................14.18
26 Poland..................................12.58
27 United Arab Emirates ..........12.43
28 Romania ...............................11.73
29 Slovak Republic....................11.20
30 Chile ......................................8.49
31 Argentina ...............................7.99
32 Turkey.....................................7.78
33 Mexico ...................................7.00
34 Russian Federation................6.56
35 China .....................................6.23
36 Panama..................................5.76
37 Brazil .....................................5.26
38 Malaysia ................................4.93
39 Venezuela ..............................4.73
40 Kazakhstan ............................4.26
41 Colombia ...............................4.23
42 Saudi Arabia ..........................4.16
43 Ukraine..................................3.48
44 Peru .......................................2.52
45 Vietnam .................................2.35
46 Jordan ...................................2.24
47 Morocco ................................1.53
48 Thailand .................................1.41
49 Kuwait....................................1.37
50 Philippines .............................1.16
51 Egypt.....................................0.94
52 South Africa ..........................0.86
53 India ......................................0.45
54 Indonesia...............................0.18
55 Pakistan.................................0.09
56 Nigeria...................................0.04
57 Bangladesh ...........................0.03
SOURCES: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources
2.15
Telephone lines
This variable is the number of main telephone lines per 100
inhabitants | 2008
RANK COUNTRY/ECONOMY SCORE
1 Switzerland ..........................64.11
2 Germany .............................62.48
3 Hong Kong SAR ..................58.72
4 Sweden................................57.83
5 France .................................56.42
6 Canada ................................54.87
7 United Kingdom ..................54.24
8 Ireland .................................49.66
9 United States ......................49.62
10 Israel ...................................45.72
11 Denmark .............................45.64
12 Spain ...................................45.41
13 Australia ..............................44.46
14 Korea, Rep. .........................44.29
15 Netherlands.........................44.27
16 Belgium ...............................42.08
17 Singapore ............................40.24
18 Norway................................39.78
19 Austria .................................39.40
20 Japan...................................38.04
21 Italy .....................................35.65
22 Vietnam ...............................33.98
23 United Arab Emirates..........33.63
24 Russian Federation ..............31.75
25 Finland..................................31.11
26 Hungary ..............................30.90
27 Ukraine................................28.65
28 Bahrain ................................28.42
29 Poland .................................25.49
30 China ...................................25.48
31 Argentina.............................24.43
32 Turkey..................................23.68
33 Romania ..............................23.58
34 Venezuela ............................22.42
35 Kazakhstan ..........................22.28
36 Czech Republic ....................21.94
37 Brazil ....................................21.43
38 Chile ....................................20.99
39 Slovak Republic ...................20.33
40 Mexico ................................19.04
41 Kuwait .................................18.53
42 Colombia ..............................17.89
43 Saudi Arabia ........................16.27
44 Malaysia ..............................15.89
45 Panama ...............................15.42
46 Egypt ...................................14.64
47 Indonesia.............................13.36
48 Thailand ...............................10.42
49 Peru .......................................9.98
50 Morocco................................9.46
51 South Africa ..........................8.91
52 Jordan ...................................8.46
53 Philippines.............................4.51
54 India ......................................3.21
55 Pakistan.................................2.50
56 Nigeria...................................0.86
57 Bangladesh ...........................0.84
SOURCES: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources
2.16
3: Data Tables | Business environment
Mobile telephone subscribers
This indicator is the number of mobile cellular telephone subscribers
per 100 inhabitants | 2008
RANK COUNTRY/ECONOMY SCORE
1 Turkey................................208.65
2 Bahrain ..............................185.77
3 Hong Kong SAR ................165.85
4 Italy ....................................151.57
5 Romania ............................142.85
6 Poland ................................141.11
7 Russian Federation ............138.15
8 Czech Republic..................133.54
9 Austria ...............................129.73
10 Finland ...............................128.76
11 Germany............................128.27
12 Israel ..................................127.38
13 Ukraine ..............................126.34
14 Denmark............................125.72
15 Morocco ............................124.80
16 Hungary.............................122.09
17 Thailand..............................121.09
18 Ireland................................120.74
19 South Africa .......................118.33
20 Spain...................................117.97
21 Argentina ...........................116.61
22 Philippines .........................115.28
321
23 Pakistan .............................115.19
24 Vietnam .............................114.54
25 Slovak Republic ..................111.67
26 Belgium ..............................111.63
27 Nigeria................................110.16
28 Australia.............................104.96
29 Malaysia ............................102.59
30 Saudi Arabia ......................102.23
31 Kuwait .................................99.59
32 United Kingdom ..................96.31
33 Kazakhstan ..........................96.06
34 Korea, Rep. .........................94.71
35 France .................................93.45
36 Sweden ...............................92.01
37 Colombia .............................91.90
38 Singapore ............................90.60
39 Switzerland..........................89.05
40 Chile ....................................88.05
41 United Arab Emirates..........86.79
42 Japan...................................86.73
43 Jordan .................................86.60
44 United States ......................80.37
45 Brazil ...................................78.47
46 Peru .....................................75.39
47 Panama ...............................72.66
48 Venezuela ............................72.19
49 Mexico ................................69.37
50 Canada ................................66.42
51 Indonesia .............................61.83
52 Egypt...................................50.62
53 Norway ................................49.74
54 China....................................47.95
55 Netherlands .........................41.66
56 India ....................................29.36
57 Bangladesh ..........................27.90
SOURCES: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources
 3: Data Tables | Business environment
2.17
Cost of starting a business
This indicator is the cost of starting a business as a percentage of
income per capita | 2009
RANK COUNTRY/ECONOMY SCORE
1 Denmark ...............................0.00
2 Ireland ...................................0.30
3 Canada ..................................0.40
4 Bahrain ..................................0.50
5 Sweden .................................0.60
6 Singapore ..............................0.70
6 United Kingdom ....................0.70
6 United States ........................0.70
9 Australia ................................0.80
10 Finland...................................0.90
10 France ...................................0.90
12 Kuwait....................................1.00
13 Hong Kong SAR.....................1.80
14 Norway ..................................1.90
15 Slovak Republic.....................2.00
15 Switzerland ...........................2.00
17 Russian Federation................2.70
18 Romania ................................2.90
19 Israel .....................................4.20
20 Germany ...............................4.70
21 Kazakhstan ............................4.80
22 China .....................................4.90
322
23 Austria ...................................5.10
24 Belgium .................................5.30
25 Netherlands...........................5.60
26 Pakistan.................................5.80
26 Ukraine..................................5.80
28 South Africa ..........................5.90
29 United Arab Emirates............6.20
30 Thailand .................................6.30
31 Brazil .....................................6.90
31 Chile ......................................6.90
33 Japan .....................................7.50
34 Saudi Arabia ...........................7.70
35 Hungary ................................8.00
36 Czech Republic......................9.20
37 Panama................................10.30
38 Argentina .............................11.00
39 Mexico .................................11.70
40 Malaysia ...............................11.90
41 Colombia .............................12.80
42 Vietnam ...............................13.30
43 Turkey ..................................14.20
44 Korea, Rep...........................14.70
45 Spain ...................................15.00
46 Egypt ...................................16.10
46 Morocco ..............................16.10
48 Italy ......................................17.90
48 Poland ..................................17.90
50 Venezuela............................24.00
51 Peru .....................................24.50
52 Indonesia.............................26.00
53 Philippines...........................28.20
54 Bangladesh .........................36.20
55 Jordan .................................49.50
56 India.....................................66.10
57 Nigeria .................................76.70
SOURCE: The World Bank, Doing Business 2010
2.18
Cost of registering property
This variable is the cost of registering property as a percentage of
income per capita | 2009
RANK COUNTRY/ECONOMY SCORE
1 Saudi Arabia ..........................0.00
2 Kazakhstan ............................0.10
2 Russian Federation................0.10
2 Slovak Republic .....................0.10
5 Switzerland............................0.40
6 Kuwait ...................................0.50
6 Poland ...................................0.50
6 United States ........................0.50
9 Denmark ...............................0.60
10 Bahrain ..................................0.90
10 Egypt.....................................0.90
12 Thailand..................................1.10
12 Vietnam..................................1.10
14 Chile ......................................1.30
14 Romania.................................1.30
16 Canada...................................1.80
17 Colombia ...............................2.00
17 United Arab Emirates............2.00
19 Venezuela ..............................2.20
20 Panama .................................2.40
21 Norway..................................2.50
22 Malaysia ................................2.60
22 Ukraine..................................2.60
24 Brazil .....................................2.70
25 Singapore ..............................2.80
26 Czech Republic......................3.00
26 Sweden .................................3.00
26 Turkey....................................3.00
29 China .....................................3.10
30 Peru .......................................3.30
31 Finland ...................................4.10
31 United Kingdom ....................4.10
33 Philippines.............................4.30
34 Austria ...................................4.50
35 Italy .......................................4.60
36 Australia ................................4.90
36 Morocco................................4.90
38 Hong Kong SAR ....................5.00
38 Israel .....................................5.00
38 Japan.....................................5.00
41 Korea, Rep.............................5.10
42 Germany ...............................5.20
42 Mexico ..................................5.20
44 France....................................6.10
45 Netherlands...........................6.20
46 Ireland ...................................6.70
47 Argentina ...............................7.00
48 Pakistan .................................7.20
48 Spain ......................................7.20
50 India .......................................7.40
51 Jordan ....................................7.50
52 South Africa ..........................8.70
53 Bangladesh..........................10.20
54 Indonesia.............................10.70
55 Hungary ...............................11.00
56 Belgium ...............................12.70
57 Nigeria.................................20.90
SOURCE: The World Bank, Doing Business 2010
2.19
Cost of closing a business
This variable is the cost of closing a business as a percentage of the
estate | 2009
RANK COUNTRY/ECONOMY SCORE
1 Colombia ...............................1.00
1 Kuwait....................................1.00
1 Norway ..................................1.00
1 Singapore ..............................1.00
5 Belgium.................................4.00
5 Canada ..................................4.00
5 Denmark ...............................4.00
5 Finland...................................4.00
5 Japan.....................................4.00
5 Korea, Rep. ...........................4.00
5 Netherlands...........................4.00
5 Pakistan.................................4.00
5 Switzerland ...........................4.00
14 United Kingdom ....................6.00
15 Peru........................................7.00
15 United States.........................7.00
17 Australia ................................8.00
17 Bangladesh ...........................8.00
17 Germany ...............................8.00
20 France ...................................9.00
20 Hong Kong SAR ....................9.00
20 India ......................................9.00
20 Ireland ...................................9.00
20 Jordan ...................................9.00
20 Russian Federation ...............9.00
20 Sweden .................................9.00
27 Bahrain ................................10.00
28 Romania ...............................11.00
29 Argentina.............................12.00
29 Brazil....................................12.00
31 Chile ....................................15.00
31 Czech Republic....................15.00
31 Hungary...............................15.00
31 Kazakhstan ..........................15.00
31 Malaysia ..............................15.00
31 Spain ...................................15.00
31 Turkey..................................15.00
31 Vietnam ...............................15.00
39 Austria .................................18.00
39 Indonesia.............................18.00
39 Mexico ................................18.00
39 Morocco..............................18.00
39 Panama ...............................18.00
39 Slovak Republic ...................18.00
39 South Africa ........................18.00
46 Poland .................................20.00
47 China ...................................22.00
47 Egypt...................................22.00
47 Italy .....................................22.00
47 Nigeria.................................22.00
47 Saudi Arabia ........................22.00
52 Israel ...................................23.00
53 United Arab Emirates..........30.00
54 Thailand...............................36.00
55 Philippines...........................38.00
55 Venezuela............................38.00
57 Ukraine................................42.00
SOURCE: The World Bank, Doing Business 2010
2.20
3: Data Tables | Business environment
Time to start a business
This variable is the time in days to start a business | 2009
RANK COUNTRY/ECONOMY SCORE
1 Australia ................................2.00
2 Singapore ..............................3.00
3 Belgium.................................4.00
3 Hungary ................................4.00
5 Canada ..................................5.00
5 Saudi Arabia ..........................5.00
7 Denmark ...............................6.00
7 Hong Kong SAR ....................6.00
7 Turkey....................................6.00
7 United States ........................6.00
11 Egypt .....................................7.00
11 France ....................................7.00
11 Norway ..................................7.00
14 Bahrain ..................................9.00
15 Italy......................................10.00
15 Netherlands.........................10.00
15 Romania ..............................10.00
18 Malaysia ...............................11.00
19 Morocco ..............................12.00
19 Panama ...............................12.00
21 Ireland .................................13.00
21 Jordan .................................13.00
323
21 Mexico ................................13.00
21 United Kingdom ..................13.00
25 Finland.................................14.00
25 Korea, Rep...........................14.00
27 Czech Republic....................15.00
27 Sweden ...............................15.00
27 United Arab Emirates..........15.00
30 Slovak Republic ...................16.00
31 Germany..............................18.00
32 Colombia .............................20.00
32 Kazakhstan..........................20.00
32 Pakistan...............................20.00
32 Switzerland .........................20.00
36 South Africa ........................22.00
37 Japan...................................23.00
38 Argentina .............................27.00
38 Chile.....................................27.00
38 Ukraine ................................27.00
41 Austria.................................28.00
42 India ....................................30.00
42 Russian Federation .............30.00
44 Nigeria .................................31.00
45 Poland .................................32.00
45 Thailand...............................32.00
47 Israel ...................................34.00
48 Kuwait .................................35.00
49 China....................................37.00
50 Peru .....................................41.00
51 Bangladesh .........................44.00
52 Spain ....................................47.00
53 Vietnam...............................50.00
54 Philippines...........................52.00
55 Indonesia.............................60.00
56 Brazil..................................120.00
57 Venezuela ..........................141.00
SOURCE: The World Bank, Doing Business 2010
 3: Data Tables | Business environment
2.21
Time to register property
This variable is the time in days to register property | 2009
RANK COUNTRY/ECONOMY SCORE
1 Saudi Arabia ..........................2.00
1 Thailand.................................2.00
1 United Arab Emirates............2.00
4 Norway .................................3.00
5 Australia ................................5.00
5 Netherlands...........................5.00
5 Singapore ..............................5.00
8 Turkey....................................6.00
9 United Kingdom ....................8.00
10 Korea, Rep. ..........................11.00
11 United States ......................12.00
12 Finland.................................14.00
12 Japan...................................14.00
12 Peru .....................................14.00
15 Sweden ...............................15.00
16 Switzerland..........................16.00
17 Canada .................................17.00
17 Hungary ...............................17.00
17 Slovak Republic....................17.00
20 Spain ...................................18.00
21 Colombia .............................20.00
22 Jordan..................................21.00
324
23 Indonesia.............................22.00
24 South Africa ........................24.00
25 Italy ......................................27.00
26 China ...................................29.00
27 Bahrain ................................31.00
27 Chile ....................................31.00
29 Austria.................................32.00
29 Panama ...............................32.00
31 Philippines...........................33.00
32 Ireland .................................38.00
33 Germany .............................40.00
33 Kazakhstan..........................40.00
35 Brazil ...................................42.00
35 Denmark .............................42.00
37 Russian Federation .............43.00
38 India ....................................44.00
39 Hong Kong SAR ..................45.00
40 Morocco ..............................47.00
40 Venezuela.............................47.00
42 Romania ..............................48.00
43 Pakistan...............................50.00
44 Argentina.............................52.00
45 Kuwait .................................55.00
46 Vietnam................................57.00
47 Egypt...................................72.00
48 Mexico.................................74.00
49 Czech Republic....................78.00
50 Belgium...............................79.00
51 Nigeria.................................82.00
52 Ukraine................................93.00
53 France .................................98.00
54 Israel..................................144.00
54 Malaysia ............................144.00
56 Poland ................................197.00
57 Bangladesh .......................245.00
SOURCE: The World Bank, Doing Business 2010
2.22
Time to close a business
This variable is the time in years to close a business | 2009
RANK COUNTRY/ECONOMY SCORE
1 Ireland ...................................0.40
2 Japan.....................................0.60
3 Canada ..................................0.80
3 Singapore ..............................0.80
5 Belgium .................................0.90
5 Finland...................................0.90
5 Norway..................................0.90
8 Australia.................................1.00
8 Spain......................................1.00
8 United Kingdom.....................1.00
11 Austria....................................1.10
11 Denmark ................................1.10
11 Hong Kong SAR .....................1.10
11 Netherlands ...........................1.10
15 Germany ................................1.20
16 Kazakhstan ............................1.50
16 Korea, Rep. ............................1.50
16 Saudi Arabia...........................1.50
16 United States.........................1.50
20 China .....................................1.70
21 Italy........................................1.80
21 Mexico...................................1.80
21 Morocco ................................1.80
24 France ....................................1.90
25 Hungary ................................2.00
25 Nigeria...................................2.00
25 South Africa ..........................2.00
25 Sweden .................................2.00
29 Malaysia ................................2.30
30 Bahrain ..................................2.50
30 Panama .................................2.50
32 Thailand .................................2.70
33 Argentina...............................2.80
33 Pakistan.................................2.80
35 Ukraine..................................2.90
36 Colombia ...............................3.00
36 Poland ...................................3.00
36 Switzerland ...........................3.00
39 Peru .......................................3.10
40 Romania ................................3.30
40 Turkey....................................3.30
42 Russian Federation................3.80
43 Bangladesh ...........................4.00
43 Brazil .....................................4.00
43 Israel .....................................4.00
43 Slovak Republic.....................4.00
43 Venezuela..............................4.00
48 Egypt.....................................4.20
48 Kuwait ...................................4.20
50 Jordan ...................................4.30
51 Chile ......................................4.50
52 Vietnam.................................5.00
53 United Arab Emirates ............5.10
54 Indonesia...............................5.50
55 Philippines.............................5.70
56 Czech Republic......................6.50
57 India .......................................7.00
SOURCE: The World Bank, Doing Business 2010
Data Tables

Section III
Financial stability
 3: Data Tables | Financial stability
3.01
Change in real effective exchange rate (REER)
This is the average percentage change in real effective exchange
rate from year to year over the period 2005–09. Higher REER repre-
sents appreciation | As of 2009
RANK COUNTRY/ECONOMY SCORE
1 Venezuela ............................14.54
2 Indonesia..............................11.62
3 Brazil .....................................9.90
4 Malaysia ................................9.14
5 Romania ................................6.88
6 Russian Federation................5.58
7 Philippines.............................5.38
8 Egypt.....................................5.36
9 Chile ......................................4.76
10 Czech Republic......................4.32
11 Slovak Republic .....................3.88
12 Norway..................................3.32
13 China .....................................3.24
14 Israel .....................................2.84
15 Colombia ...............................2.76
16 Belgium .................................2.50
16 Thailand .................................2.50
18 Singapore ..............................2.28
18 Spain .....................................2.28
20 Kuwait ...................................2.18
21 Ukraine ..................................1.90
22 Ireland....................................1.88
326
23 Poland ....................................1.74
24 Australia.................................1.54
25 Peru........................................1.18
26 Saudi Arabia...........................1.18
27 France ....................................1.04
28 Panama .................................0.88
29 Pakistan.................................0.72
30 Netherlands...........................0.66
31 Italy .......................................0.64
32 Morocco................................0.62
33 Denmark ...............................0.60
33 Finland...................................0.60
35 Japan.....................................0.50
36 Austria ...................................0.44
37 Germany ...............................0.40
38 Hungary ................................0.08
39 Turkey....................................0.00
40 India.....................................–0.36
41 Switzerland..........................–0.42
42 United States ......................–0.66
43 Mexico .................................–1.18
44 Sweden................................–1.46
45 Argentina .............................–1.58
46 Canada .................................–1.74
47 South Africa .........................–1.76
48 Hong Kong SAR ..................–2.02
49 Korea, Rep...........................–3.18
50 Bahrain ................................–3.34
51 United Kingdom ..................–4.48
n/a Bangladesh..............................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Nigeria .....................................n/a
n/a United Arab Emirates ..............n/a
n/a Vietnam ...................................n/a
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
3.02
External vulnerability indicator
The external vulnerability indicator is the sum of several measures of
external exposure as a percentage of foreign exchange reserves |
2009
RANK COUNTRY/ECONOMY SCORE
1 Saudi Arabia ...........................7.00
2 China ...................................12.40
3 Egypt ...................................15.20
4 Peru .....................................22.40
5 Bangladesh .........................22.70
6 Brazil ...................................22.80
7 Morocco...............................27.80
8 Malaysia ..............................29.60
9 Panama................................30.10
10 Philippines...........................30.30
11 Thailand ...............................31.90
12 Pakistan...............................33.70
13 Russian Federation..............33.90
14 Mexico ................................40.00
15 India.....................................40.10
16 Colombia .............................43.60
17 Vietnam................................47.40
18 Indonesia.............................54.30
19 Korea, Rep. .........................66.80
20 Romania ..............................68.10
21 Israel ...................................68.60
22 South Africa .........................74.50
23 Czech Republic ....................76.20
24 Jordan..................................81.20
25 Kuwait .................................83.50
26 Argentina...........................100.20
27 Venezuela ..........................106.60
28 Chile...................................115.20
29 Kazakhstan ........................126.80
30 Poland................................130.50
31 Ukraine ..............................138.80
32 Turkey ................................154.50
33 Hungary .............................201.40
34 United Arab Emirates ........257.70
35 Bahrain ..............................775.20
n/a Australia ..................................n/a
n/a Austria .....................................n/a
n/a Belgium ...................................n/a
n/a Canada ....................................n/a
n/a Denmark..................................n/a
n/a Finland.....................................n/a
n/a France......................................n/a
n/a Germany..................................n/a
n/a Hong Kong SAR ......................n/a
n/a Ireland .....................................n/a
n/a Italy..........................................n/a
n/a Japan .......................................n/a
n/a Netherlands.............................n/a
n/a Nigeria .....................................n/a
n/a Norway....................................n/a
n/a Singapore ................................n/a
n/a Slovak Republic .......................n/a
n/a Spain .......................................n/a
n/a Sweden ...................................n/a
n/a Switzerland..............................n/a
n/a United Kingdom ......................n/a
n/a United States ..........................n/a
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
3.03
Current account balance to GDP
This variable is the three-year average of current account balance to
GDP and provides an indicator of the difficulty a country might have
in mobilizing the foreign exchange necessary for debt service |
2007–09
RANK COUNTRY/ECONOMY SCORE
1 Kuwait ..................................37.10
2 Singapore ............................21.97
3 Saudi Arabia ........................19.22
4 Nigeria .................................16.93
5 Malaysia ..............................16.65
6 Norway................................15.50
7 Hong Kong SAR ..................12.35
8 Bahrain.................................10.16
9 China .....................................8.73
10 Venezuela...............................7.86
11 Sweden..................................7.59
12 Switzerland ............................7.04
13 Germany ...............................6.37
14 Netherlands...........................6.23
15 Russian Federation................5.33
16 United Arab Emirates............4.95
17 Thailand .................................4.88
18 Philippines .............................4.14
19 Japan.....................................3.61
20 Finland...................................2.87
21 Austria ...................................2.66
22 Denmark ...............................2.55
23 Israel .....................................2.43
24 Argentina...............................2.19
25 Bangladesh ............................1.97
26 Korea, Rep. ............................1.69
27 Chile ......................................1.68
28 Indonesia ...............................1.47
29 Egypt.....................................0.03
30 Belgium ...............................–0.21
31 Canada ................................–0.39
32 Peru .....................................–0.79
33 Mexico ................................–0.96
34 Brazil ....................................–1.05
35 France ..................................–1.57
36 India .....................................–1.78
37 United Kingdom...................–1.84
38 Kazakhstan ..........................–2.14
39 Czech Republic....................–2.41
40 Colombia .............................–2.50
41 Italy......................................–3.07
42 Morocco ..............................–3.45
43 Poland..................................–3.83
44 Ukraine ................................–4.14
45 United States ......................–4.33
46 Ireland .................................–4.49
47 Hungary...............................–4.53
48 Turkey ..................................–4.57
49 Australia ..............................–4.86
50 Slovak Republic ...................–5.00
51 South Africa.........................–6.08
52 Pakistan...............................–6.28
53 Panama................................–6.29
54 Spain ...................................–8.22
55 Vietnam ...............................–9.84
56 Romania.............................–10.01
57 Jordan.................................–11.15
SOURCE: IMF, World Economic Outlook Database (April 2010)
3.04
3: Data Tables | Financial stability
Dollarization vulnerability indicator
This variable measures the risk of payment crisis and default
originating from the presence of a large amount of dollarization in the
domestic banking system | 2009
RANK COUNTRY/ECONOMY SCORE
1 Australia ................................0.00
1 Austria...................................0.00
1 Belgium.................................0.00
1 Brazil .....................................0.00
1 Canada ..................................0.00
1 Colombia ...............................0.00
1 Denmark ...............................0.00
1 Finland...................................0.00
1 France ...................................0.00
1 Germany ...............................0.00
1 Hong Kong SAR ....................0.00
1 Ireland ...................................0.00
1 Italy .......................................0.00
1 Japan.....................................0.00
1 Netherlands...........................0.00
1 Norway .................................0.00
1 Singapore ..............................0.00
1 Slovak Republic.....................0.00
1 Spain .....................................0.00
1 Sweden .................................0.00
1 Switzerland ...........................0.00
1 United Kingdom ....................0.00
327
1 United States ........................0.00
24 Venezuela ..............................0.60
25 Thailand .................................2.50
26 Morocco................................3.60
27 India ......................................4.30
28 Mexico .................................11.40
29 Indonesia .............................15.10
30 Hungary ..............................25.20
31 Argentina.............................25.80
32 Russian Federation..............33.50
33 Jordan .................................34.30
34 Pakistan ...............................37.80
35 Philippines...........................39.90
36 Kazakhstan ..........................43.20
37 Romania ..............................49.10
38 Peru .....................................50.80
39 Ukraine................................56.80
40 Egypt...................................62.00
41 Turkey..................................85.90
42 Vietnam .............................104.50
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Chile ........................................n/a
n/a China .......................................n/a
n/a Czech Republic........................n/a
n/a Israel........................................n/a
n/a Korea, Rep...............................n/a
n/a Kuwait .....................................n/a
n/a Malaysia ..................................n/a
n/a Nigeria .....................................n/a
n/a Panama....................................n/a
n/a Poland......................................n/a
n/a Saudi Arabia ............................n/a
n/a South Africa.............................n/a
n/a United Arab Emirates ..............n/a
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
 3: Data Tables | Financial stability
3.05
External debt to GDP (developing economies)
This variable is the external debt as a percentage of GDP | 2009
RANK COUNTRY/ECONOMY SCORE
1 China .....................................9.40
2 Brazil....................................15.40
3 Egypt ...................................16.80
4 India.....................................19.70
5 Kuwait .................................20.70
6 Mexico.................................22.10
7 Saudi Arabia ........................22.50
8 Venezuela ............................22.70
9 Colombia .............................23.20
10 South Africa ........................24.40
11 Thailand ...............................25.70
12 Bangladesh .........................25.80
13 Morocco..............................26.80
14 Peru .....................................28.10
15 Pakistan ...............................31.50
16 Indonesia.............................32.40
17 Malaysia ..............................34.90
18 Korea, Rep. .........................36.50
18 Vietnam ...............................36.50
20 Argentina.............................38.20
21 Russian Federation..............38.30
22 Philippines...........................39.40
328
23 Turkey ..................................45.10
24 Chile ....................................45.30
25 Czech Republic....................45.50
26 Israel ...................................46.60
27 Panama................................49.10
28 Poland .................................58.70
29 United Arab Emirates ..........61.80
30 Jordan..................................63.10
31 Romania ..............................68.10
32 Ukraine................................88.60
33 Kazakhstan ..........................94.70
34 Hungary.............................139.40
35 Bahrain ..............................169.60
n/a Australia ..................................n/a
n/a Austria .....................................n/a
n/a Belgium ...................................n/a
n/a Canada ....................................n/a
n/a Denmark..................................n/a
n/a Finland.....................................n/a
n/a France......................................n/a
n/a Germany..................................n/a
n/a Hong Kong SAR ......................n/a
n/a Ireland .....................................n/a
n/a Italy..........................................n/a
n/a Japan .......................................n/a
n/a Netherlands.............................n/a
n/a Nigeria .....................................n/a
n/a Norway....................................n/a
n/a Singapore ................................n/a
n/a Slovak Republic .......................n/a
n/a Spain .......................................n/a
n/a Sweden ...................................n/a
n/a Switzerland..............................n/a
n/a United Kingdom ......................n/a
n/a United States ..........................n/a
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
3.06
Net international investment position to GDP
(advanced economies)
This variable is the net international investment position as a
percentage of GDP | 2009
RANK COUNTRY/ECONOMY SCORE
1 Hong Kong SAR ................353.10
2 Switzerland ........................131.90
3 Japan...................................55.30
4 Germany ..............................27.70
5 Netherlands.........................18.60
6 Finland.................................–6.70
7 Canada .................................–7.80
8 Denmark..............................–8.40
9 United Kingdom.................–13.10
10 Austria ...............................–15.50
11 Italy....................................–19.20
12 Sweden .............................–19.30
12 United States ....................–19.30
14 Slovak Republic ..................–57.60
15 Australia .............................–61.20
16 Ireland ...............................–64.90
17 Spain .................................–93.60
n/a Argentina.................................n/a
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Belgium ...................................n/a
n/a Brazil........................................n/a
n/a Chile ........................................n/a
n/a China .......................................n/a
n/a Colombia .................................n/a
n/a Czech Republic........................n/a
n/a Egypt .......................................n/a
n/a France......................................n/a
n/a Hungary...................................n/a
n/a India.........................................n/a
n/a Indonesia.................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Korea, Rep...............................n/a
n/a Kuwait .....................................n/a
n/a Malaysia ..................................n/a
n/a Mexico ....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Norway....................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Peru .........................................n/a
n/a Philippines ...............................n/a
n/a Poland......................................n/a
n/a Romania ..................................n/a
n/a Russian Federation..................n/a
n/a Saudi Arabia ............................n/a
n/a Singapore ................................n/a
n/a South Africa.............................n/a
n/a Thailand ...................................n/a
n/a Turkey ......................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
3.07
Frequency of banking crises
This variable is calculated based on the number of banking crises
that countries experienced from 1970 to 2010. Recent crises are
weighted more heavily | As of 2010
RANK COUNTRY/ECONOMY SCORE
1 Australia ................................0.00
1 Bahrain ..................................0.00
1 Canada ..................................0.00
1 Hong Kong SAR ....................0.00
1 Italy .......................................0.00
1 Pakistan.................................0.00
1 Saudi Arabia ..........................0.00
1 Singapore ..............................0.00
1 South Africa ..........................0.00
1 United Arab Emirates............0.00
11 Egypt.....................................0.50
11 Israel .....................................0.50
11 Morocco................................0.50
14 Kuwait ...................................0.75
14 Peru .......................................0.75
16 Bangladesh ............................1.00
16 Jordan....................................1.00
16 Panama..................................1.00
16 Romania ................................1.00
20 Chile ......................................1.25
20 Finland ...................................1.25
20 India .......................................1.25
20 Nigeria ...................................1.25
20 Norway ..................................1.25
20 Poland ....................................1.25
20 Venezuela ..............................1.25
27 China .....................................1.50
27 Czech Republic ......................1.50
27 Indonesia ...............................1.50
27 Japan .....................................1.50
27 Korea, Rep. ............................1.50
27 Malaysia.................................1.50
27 Slovak Republic .....................1.50
27 Vietnam .................................1.50
35 Austria...................................2.00
35 Belgium.................................2.00
35 Denmark ...............................2.00
35 France ...................................2.00
35 Germany ...............................2.00
35 Ireland ...................................2.00
35 Kazakhstan............................2.00
35 Mexico ..................................2.00
35 Netherlands...........................2.00
35 Switzerland ...........................2.00
35 United Kingdom ....................2.00
46 Brazil .....................................2.25
46 Colombia ...............................2.25
46 Philippines.............................2.25
46 Thailand .................................2.25
46 Turkey....................................2.25
51 Spain .....................................2.50
52 United States ........................3.00
53 Hungary ................................3.25
53 Sweden .................................3.25
55 Russian Federation................3.50
55 Ukraine..................................3.50
57 Argentina...............................4.50
SOURCE: Luc Laeven and Fabian Valencia. 2008. “Systemic Banking
Crises: A New Database.” IMF Working Paper 08/224, Washington,
DC: IMF. Updated June 2010. All weighting is based on World
Economic Forum analysis
3.08
3: Data Tables | Financial stability
Financial strengths indicator
This is the weighted average financial strength rating by bank
assets | 2010
RANK COUNTRY/ECONOMY SCORE
1 Australia ................................9.00
1 Canada ..................................9.00
1 Hong Kong SAR ....................9.00
1 Singapore ..............................9.00
5 Finland...................................8.00
6 Chile.......................................7.00
6 France ....................................7.00
6 Switzerland ............................7.00
6 United States.........................7.00
10 Belgium.................................6.00
10 Brazil .....................................6.00
10 Czech Republic......................6.00
10 Denmark ...............................6.00
10 Italy .......................................6.00
10 Jordan ...................................6.00
10 Mexico ..................................6.00
10 Netherlands...........................6.00
10 Norway .................................6.00
10 Saudi Arabia ..........................6.00
10 Spain .....................................6.00
10 Sweden .................................6.00
22 Bahrain ..................................5.00
329
22 Germany ...............................5.00
22 Israel .....................................5.00
22 Japan.....................................5.00
22 Korea, Rep. ...........................5.00
22 Kuwait ...................................5.00
22 Malaysia ................................5.00
22 South Africa ..........................5.00
22 Turkey....................................5.00
22 United Kingdom ....................5.00
32 Austria...................................4.00
32 Colombia ...............................4.00
32 Hungary ................................4.00
32 India ......................................4.00
32 Morocco................................4.00
32 Peru.......................................4.00
32 Poland ...................................4.00
32 Slovak Republic.....................4.00
32 United Arab Emirates............4.00
41 Argentina...............................3.00
41 Egypt.....................................3.00
41 Indonesia...............................3.00
41 Panama .................................3.00
41 Philippines.............................3.00
41 Romania ................................3.00
41 Thailand.................................3.00
48 China .....................................2.00
48 Ireland ...................................2.00
48 Pakistan.................................2.00
48 Russian Federation ...............2.00
48 Vietnam.................................2.00
53 Kazakhstan ............................1.00
53 Ukraine ..................................1.00
53 Venezuela ..............................1.00
n/a Bangladesh..............................n/a
n/a Nigeria .....................................n/a
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
 3: Data Tables | Financial stability
3.09
Aggregate measure of real estate bubbles
This is the aggregate measure of real estate bubbles based on
price-to-income ratio and price-to-rent ratio | 2009
RANK COUNTRY/ECONOMY SCORE
1 Ireland ...................................6.84
2 Peru .......................................6.71
3 Panama .................................6.68
4 Malaysia ................................6.66
5 Chile ......................................6.57
6 Hungary ................................6.56
7 Mexico ..................................6.33
8 Colombia ...............................6.27
9 Brazil .....................................6.26
10 Netherlands...........................6.19
11 Jordan ...................................6.12
12 Belgium .................................5.91
13 Argentina...............................5.86
14 Indonesia...............................5.84
15 Turkey....................................5.72
16 Egypt.....................................5.65
17 United Arab Emirates............5.58
18 Germany ...............................5.43
19 Poland ...................................5.33
20 Thailand .................................5.31
21 Italy .......................................5.18
22 Israel......................................5.17
330
23 Japan .....................................5.11
24 Slovak Republic .....................4.98
25 Austria ...................................4.95
26 Denmark ...............................4.94
27 Canada ..................................4.93
28 Ukraine..................................4.84
29 Finland...................................4.80
30 Romania ................................4.68
31 Australia ................................4.66
32 Switzerland............................4.66
33 Morocco................................4.55
34 Philippines.............................4.46
35 Spain .....................................4.32
36 Czech Republic......................4.07
37 Singapore ..............................4.00
38 France ...................................3.96
39 South Africa ..........................3.80
40 United States ........................3.70
41 United Kingdom.....................3.11
42 Hong Kong SAR ....................3.01
43 India .......................................1.16
44 China .....................................1.00
44 Russian Federation ................1.00
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Kazakhstan ..............................n/a
n/a Korea, Rep...............................n/a
n/a Kuwait .....................................n/a
n/a Nigeria .....................................n/a
n/a Norway....................................n/a
n/a Pakistan...................................n/a
n/a Saudi Arabia ............................n/a
n/a Sweden ...................................n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Global Property Guide website (data retrieved August 4, 2010),
www.globalpropertyguide.com
3.10
Financial Stress Index
This measures the extent to which a country’s financial system is
under strain | 2009
RANK COUNTRY/ECONOMY SCORE
1 Thailand ...............................–0.19
2 Turkey ..................................–0.07
3 China .....................................0.09
4 Philippines.............................0.35
5 Morocco................................0.44
6 Finland...................................0.48
7 Malaysia ................................0.63
8 Argentina ...............................1.18
9 Sweden .................................1.36
10 Brazil ......................................1.42
11 France ....................................1.58
12 Austria ...................................1.92
13 Chile ......................................2.83
14 Spain .....................................3.16
15 Australia ................................3.84
16 Switzerland............................3.91
17 Japan.....................................4.00
18 Indonesia...............................4.18
19 Italy .......................................4.56
20 South Africa ...........................4.74
21 Mexico ..................................4.83
22 Slovak Republic .....................4.89
23 Poland ...................................5.24
24 Peru .......................................5.45
25 Korea, Rep. ...........................5.58
26 Colombia ...............................5.91
27 Israel......................................6.14
28 Pakistan.................................6.21
29 Russian Federation................6.77
30 Denmark ...............................8.45
31 Czech Republic......................8.83
32 Romania ................................9.54
33 Canada.................................10.14
34 Germany..............................10.31
35 Belgium ...............................10.75
36 Hungary...............................12.81
37 Netherlands.........................13.55
38 United States ......................14.82
39 United Kingdom...................15.11
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Egypt .......................................n/a
n/a Hong Kong SAR ......................n/a
n/a India.........................................n/a
n/a Ireland .....................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Nigeria .....................................n/a
n/a Norway....................................n/a
n/a Panama....................................n/a
n/a Saudi Arabia ............................n/a
n/a Singapore ................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Ravi Balakrishnan, Stephan Danninger, Selim Elekdag, and Irina
Tytell. 2009. The Transmission of Financial Stress from Advanced to
Emerging Economies. Washington DC: IMF.
3.11
Tier 1 capital ratio
This is the weighted average Tier 1 regulatory capital ratio at the 10
largest banks | 2009 or most recent year available
RANK COUNTRY/ECONOMY SCORE
1 Jordan .................................16.84
2 Switzerland..........................15.44
3 Ukraine ................................14.44
4 Saudi Arabia ........................14.40
5 Mexico ................................13.47
6 United Arab Emirates ..........13.44
7 Turkey ..................................12.88
8 Finland.................................12.50
9 Brazil....................................12.42
10 Kuwait .................................12.41
11 Russian Federation ..............12.01
12 Canada .................................11.89
13 Belgium................................11.82
14 Denmark ..............................11.55
15 Pakistan................................11.54
16 South Africa .........................11.52
17 Malaysia ...............................11.38
18 Thailand................................11.33
19 Philippines............................11.32
20 Poland...................................11.11
21 Hong Kong SAR ...................11.05
22 Austria..................................11.05
23 Germany..............................10.81
24 Sweden ...............................10.47
25 Singapore ............................10.45
26 United Kingdom ....................9.84
27 Kazakhstan ............................9.65
28 Spain .....................................9.56
29 United States ........................9.32
30 France ...................................8.93
31 Norway..................................8.86
32 Romania ................................8.26
33 Australia ................................8.15
34 Italy ........................................7.87
35 Korea, Rep. ............................7.71
36 Netherlands ...........................7.55
37 Ireland ....................................7.19
38 Japan .....................................7.09
39 Panama .................................6.91
40 India ......................................6.79
41 Indonesia...............................6.75
42 China .....................................6.63
43 Israel .....................................6.38
44 Bangladesh ...........................5.95
n/a Argentina.................................n/a
n/a Bahrain ....................................n/a
n/a Chile ........................................n/a
n/a Colombia .................................n/a
n/a Czech Republic........................n/a
n/a Egypt .......................................n/a
n/a Hungary...................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Peru .........................................n/a
n/a Slovak Republic .......................n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: BankScope database, data retrieved July 2010
3.12
3: Data Tables | Financial stability
Output loss during banking crises
This is the difference between actual and trend real GDP during a
banking crisis. Output loss during recent crises is weighted more
heavily | 2010
RANK COUNTRY/ECONOMY SCORE
1 Australia ................................0.00
1 Bahrain ..................................0.00
1 Bangladesh ...........................0.00
1 Canada ..................................0.00
1 Czech Republic......................0.00
1 Hong Kong SAR ....................0.00
1 India ......................................0.00
1 Italy .......................................0.00
1 Kazakhstan............................0.00
1 Nigeria...................................0.00
1 Pakistan.................................0.00
1 Poland ...................................0.00
1 Romania ................................0.00
1 Russian Federation ...............0.00
1 Saudi Arabia ..........................0.00
1 Singapore ..............................0.00
1 Slovak Republic.....................0.00
1 South Africa ..........................0.00
1 Switzerland ...........................0.00
1 United Arab Emirates............0.00
1 Vietnam.................................0.00
22 Egypt.....................................0.44
23 Venezuela ..............................1.45
24 Norway..................................6.43 331
25 Ukraine ................................10.00
26 Morocco ..............................10.96
27 Chile ....................................16.41
28 China ...................................29.10
29 Austria.................................34.00
30 Mexico .................................37.01
31 Germany .............................38.00
32 Israel....................................38.01
33 Peru .....................................41.40
34 France .................................42.00
35 Belgium...............................46.00
36 Malaysia ...............................47.17
37 United Kingdom ..................48.00
38 Netherlands.........................50.00
38 United States ......................50.00
40 Brazil ...................................62.30
41 Japan ...................................67.50
42 Philippines ...........................68.76
43 Denmark .............................72.00
44 Turkey ..................................81.78
45 Hungary ..............................84.00
46 Panama ...............................85.04
47 Korea, Rep. .........................86.38
48 Finland.................................86.99
49 Colombia ...........................100.32
50 Sweden .............................103.13
51 Indonesia...........................103.53
52 Jordan................................106.37
53 Spain ..................................107.25
54 Kuwait ................................107.58
55 Argentina...........................165.92
56 Thailand .............................182.57
57 Ireland ...............................220.00
SOURCE: Luc Laeven and Fabian Valencia. 2008. “Systemic Banking
Crises: A New Database.” IMF Working Paper 08/224, Washington,
DC: IMF. Updated June 2010. All weighting is based on World
Economic Forum analysis
 3: Data Tables | Financial stability
3.13
Local currency sovereign rating
This variable measures the probability that a country will pay its local
currency borrowing in full and in a timely manner | 2010
RANK COUNTRY/ECONOMY SCORE
1 Australia ..............................20.00
1 Austria.................................20.00
1 Canada ................................20.00
1 Denmark .............................20.00
1 Finland.................................20.00
1 France .................................20.00
1 Germany .............................20.00
1 Netherlands.........................20.00
1 Norway ...............................20.00
1 Singapore ............................20.00
1 Sweden ...............................20.00
1 Switzerland .........................20.00
1 United Kingdom ..................20.00
1 United States ......................20.00
15 Belgium ...............................19.00
15 Hong Kong SAR ..................19.00
17 Chile ....................................18.00
17 Ireland .................................18.00
17 Japan...................................18.00
17 Spain ...................................18.00
21 Israel ....................................17.00
21 Kuwait ..................................17.00
332
21 Saudi Arabia .........................17.00
24 China ...................................16.00
24 Czech Republic....................16.00
24 Italy .....................................16.00
24 Korea, Rep...........................16.00
24 Malaysia ..............................16.00
24 Slovak Republic ...................16.00
24 South Africa ........................16.00
31 Bahrain ................................15.00
31 Mexico ................................15.00
31 Poland .................................15.00
34 Thailand ...............................14.00
35 Brazil....................................13.00
35 Colombia .............................13.00
35 Morocco ..............................13.00
35 Peru .....................................13.00
35 Russian Federation..............13.00
40 Kazakhstan ..........................12.00
41 Egypt....................................11.00
41 Hungary ...............................11.00
41 India .....................................11.00
41 Jordan ..................................11.00
41 Panama ................................11.00
41 Romania ...............................11.00
47 Indonesia.............................10.00
47 Philippines ...........................10.00
47 Turkey ..................................10.00
47 Vietnam ...............................10.00
51 Bangladesh ...........................8.00
51 Venezuela..............................8.00
53 Nigeria ...................................7.00
53 Ukraine ..................................7.00
55 Argentina...............................5.00
55 Pakistan.................................5.00
n/a United Arab Emirates ..............n/a
SOURCE: Standard and Poor’s, July 2010
3.14
Foreign currency sovereign rating
This variable measures the probability that a country will pay its
foreign currency borrowing in full and in a timely manner | 2010
RANK COUNTRY/ECONOMY SCORE
1 Australia ..............................20.00
1 Austria.................................20.00
1 Canada ................................20.00
1 Denmark .............................20.00
1 Finland.................................20.00
1 France .................................20.00
1 Germany .............................20.00
1 Netherlands.........................20.00
1 Norway ...............................20.00
1 Singapore ............................20.00
1 Sweden ...............................20.00
1 Switzerland .........................20.00
1 United States ......................20.00
14 United Kingdom ..................19.70
15 Belgium ...............................19.00
15 Hong Kong SAR ..................19.00
17 Ireland ..................................17.70
17 Japan....................................17.70
17 Spain ....................................17.70
20 Kuwait ..................................17.00
20 Saudi Arabia .........................17.00
22 Chile ....................................16.00
22 China ...................................16.00
22 Italy .....................................16.00
22 Slovak Republic ...................16.00
26 Bahrain ................................15.00
26 Czech Republic....................15.00
26 Israel....................................15.00
26 Korea, Rep...........................15.00
30 Malaysia ..............................14.00
30 Poland .................................14.00
32 South Africa.........................12.70
32 Thailand ...............................12.70
34 Mexico ................................12.00
34 Russian Federation..............12.00
36 Brazil ....................................11.00
36 Hungary ...............................11.00
36 India .....................................11.00
36 Kazakhstan...........................11.00
36 Morocco...............................11.00
36 Panama ................................11.00
36 Peru......................................11.00
43 Colombia .............................10.30
44 Egypt ...................................10.00
44 Romania ..............................10.00
46 Indonesia...............................9.30
46 Turkey....................................9.30
48 Jordan ...................................9.00
49 Vietnam .................................8.70
50 Bangladesh ...........................8.00
50 Philippines.............................8.00
50 Venezuela..............................8.00
53 Nigeria ...................................7.00
54 Ukraine..................................6.00
55 Argentina...............................5.00
55 Pakistan.................................5.00
n/a United Arab Emirates ..............n/a
SOURCE: Standard and Poor’s, July 2010
3.15
Aggregate macroprudential indicator
This is the aggregate measure of macroprudential soundness based
on real GDP growth, deposit interest rate, inflation volatility, and
inflation level | 2009 or most recent available
RANK COUNTRY/ECONOMY SCORE
1 Panama..................................6.01
2 Bahrain ..................................5.96
3 China .....................................5.94
4 Saudi Arabia ..........................5.84
5 Philippines.............................5.82
6 Malaysia ................................5.82
7 Peru .......................................5.77
8 Korea, Rep.............................5.76
9 Jordan....................................5.76
10 Poland ...................................5.73
11 Hong Kong SAR ....................5.71
12 United States ........................5.66
13 India ......................................5.61
14 Australia ................................5.58
15 United Arab Emirates............5.53
16 Japan.....................................5.50
17 France ...................................5.46
18 Canada ..................................5.45
19 Switzerland............................5.43
20 Slovak Republic .....................5.39
21 Belgium .................................5.38
22 Indonesia...............................5.34
23 Thailand .................................5.30
24 Israel .....................................5.26
25 Austria ...................................5.26
26 Singapore ..............................5.26
27 Kazakhstan ............................5.21
28 Bangladesh............................5.15
29 Sweden .................................5.09
30 Morocco................................5.05
31 Mexico ..................................4.95
32 Germany ...............................4.94
33 Norway..................................4.94
34 Czech Republic......................4.92
35 Argentina...............................4.82
36 Brazil .....................................4.81
37 Colombia ...............................4.80
38 Finland...................................4.67
39 United Kingdom ....................4.65
40 Kuwait ...................................4.64
41 Vietnam .................................4.62
42 Denmark ...............................4.48
43 Chile ......................................4.48
44 Netherlands...........................4.45
45 Spain .....................................4.10
46 Nigeria...................................4.05
47 Ireland ...................................3.89
48 South Africa ..........................3.80
49 Italy........................................3.74
50 Romania ................................3.63
51 Egypt.....................................3.50
52 Hungary ................................3.37
53 Russian Federation................3.30
54 Turkey....................................2.99
55 Pakistan.................................2.92
56 Venezuela ..............................2.37
57 Ukraine ..................................1.72
SOURCES: GDP and inflation level data from the IMF, World Economic
Outlook Database (April 2010); deposit interest rate data from the
World Bank, Financial Development Indicators, retrieved August 2010;
inflation volatility data from Bloomberg, retrieved September 2010
3.16
3: Data Tables | Financial stability
Manageability of public debt
This variable is based on total debt owed by government to domestic
residents, foreign nationals, and multilateral institutions as a percent-
age of GDP | 2009
RANK COUNTRY/ECONOMY SCORE
1 Chile ......................................6.13
2 Russian Federation................8.29
3 Kuwait ...................................9.48
4 Nigeria .................................13.12
5 Kazakhstan ..........................13.73
6 China ...................................16.89
7 Venezuela .............................17.36
8 Ukraine................................20.20
9 Australia...............................21.99
10 Saudi Arabia ........................22.97
11 Korea, Rep. .........................23.53
12 Romania ..............................24.02
13 Peru .....................................25.04
14 Indonesia .............................27.38
15 South Africa ........................29.96
16 Czech Republic....................33.15
17 Slovak Republic ...................35.66
18 Sweden ...............................36.06
19 Hong Kong SAR ...................37.39
20 Bangladesh ..........................37.48
21 Bahrain ................................38.81
22 Mexico ................................39.09
333
23 Switzerland..........................40.33
24 Denmark ..............................41.57
25 Finland.................................44.38
26 Panama ...............................44.40
27 Colombia .............................46.15
28 Turkey..................................46.28
29 Thailand ...............................46.34
30 Poland .................................46.46
31 Pakistan ...............................47.99
32 Argentina.............................48.67
33 Norway................................49.20
34 United Arab Emirates..........49.84
35 Vietnam ...............................52.20
36 United States ......................52.92
37 Spain ...................................53.24
38 Malaysia ..............................53.73
39 Morocco...............................57.22
40 Philippines............................57.33
41 Jordan .................................59.39
42 Netherlands .........................61.02
43 India.....................................62.15
44 Brazil ...................................62.79
45 Ireland .................................63.27
46 Austria..................................67.15
47 United Kingdom ..................68.08
48 Hungary ...............................71.83
49 Germany .............................73.30
50 France ..................................77.05
51 Israel ...................................78.35
52 Egypt...................................80.90
53 Canada ................................82.45
54 Belgium ...............................96.70
55 Singapore...........................113.14
56 Italy ....................................115.77
57 Japan.................................189.21
SOURCES: Public debt data from the Economist Intelligence Unit
CountryData Database, data retrieved August 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
 3: Data Tables | Financial stability
3.17
Credit default swap spreads
This measure shows the spreads on sovereign credit default swaps |
2010

RANK COUNTRY/ECONOMY SCORE

1 Norway................................25.95
2 Finland.................................33.20
3 United States.......................37.93
4 Denmark ..............................41.44
5 Sweden ...............................41.97
6 Germany .............................42.55
7 Canada ................................42.96
8 Netherlands .........................47.29
9 Singapore ............................50.12
10 Switzerland ..........................51.50
11 Hong Kong SAR ...................57.87
12 Australia ..............................59.64
13 Saudi Arabia ........................72.24
14 United Kingdom...................74.61
15 France .................................86.35
16 Austria .................................89.23
17 China ...................................90.04
18 Slovak Republic ...................91.73
19 Japan...................................96.04
20 Czech Republic....................99.99
21 Malaysia.............................100.14
22 Chile ..................................102.29
334
23 Israel ..................................119.66
24 Morocco ............................124.64
25 Korea, Rep.........................126.15
26 Belgium .............................129.33
27 Panama .............................130.07
28 Thailand .............................132.11
29 Peru ...................................133.59
30 Mexico ..............................134.30
31 Brazil..................................136.49
32 Colombia ...........................145.76
33 Poland................................149.70
34 Philippines .........................170.87
35 South Africa.......................172.66
36 Italy....................................173.23
37 Bahrain ..............................175.69
38 Indonesia...........................179.67
39 Turkey ................................186.42
40 Russian Federation............189.34
41 Egypt..................................211.92
42 Kazakhstan.........................227.29
43 Spain .................................245.86
44 Vietnam .............................252.82
45 Ireland ...............................254.15
46 United Arab Emirates........298.60
47 Hungary ............................332.48
48 Romania ............................378.80
49 Ukraine..............................628.68
50 Pakistan .............................718.10
51 Argentina...........................970.13
52 Venezuela .......................1,402.69
n/a Bangladesh..............................n/a
n/a India.........................................n/a
n/a Jordan .....................................n/a
n/a Kuwait .....................................n/a
n/a Nigeria .....................................n/a

SOURCE: CMA DataVision and Markit CDS, data retrieved July 2010
Data Tables

Section IV
Banking financial services
 3: Data Tables | Banking financial services
4.01
Deposit money bank assets to GDP
These are claims on domestic real nonfinancial sector by deposit
money banks as a share of GDP | 2008
RANK COUNTRY/ECONOMY SCORE
1 Denmark............................219.51
2 Ireland ...............................208.28
3 Netherlands.......................200.84
4 Spain ..................................197.85
5 United Kingdom ................189.59
6 Switzerland........................184.57
7 Japan.................................150.86
8 Canada ..............................140.72
9 Hong Kong SAR ................140.43
10 Sweden..............................131.96
11 Italy.....................................127.11
12 Austria ...............................122.99
13 Germany ............................121.28
14 France ................................121.25
15 Australia .............................121.23
16 Jordan................................119.79
17 Korea, Rep. ........................114.33
18 Belgium ..............................111.06
19 Singapore...........................110.56
20 Malaysia ............................102.64
21 Vietnam .............................102.49
22 Israel ...................................95.54
336
23 Thailand ...............................88.43
24 South Africa .........................87.66
25 Panama ...............................83.90
26 Finland.................................83.70
27 Norway................................83.33
28 Brazil ...................................83.22
29 Morocco ..............................81.38
30 Hungary ..............................79.65
31 Chile ....................................71.85
32 Kuwait .................................70.45
33 United States ......................69.12
34 Kazakhstan ..........................66.19
35 India ....................................64.97
36 Egypt...................................62.36
37 Czech Republic....................60.95
38 Slovak Republic ...................53.53
39 Bangladesh .........................52.88
40 Saudi Arabia.........................51.52
41 Poland .................................50.56
42 Turkey..................................48.51
43 Colombia..............................47.50
44 Russian Federation ..............41.35
45 Pakistan...............................39.85
46 Romania ..............................38.56
47 Mexico ................................33.50
48 Nigeria .................................33.13
49 Philippines...........................32.40
50 Indonesia.............................30.25
51 Venezuela ............................29.55
52 Peru .....................................20.55
53 Argentina.............................20.45
n/a Bahrain ....................................n/a
n/a China .......................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
4.02
Central Bank assets to GDP
These are claims on domestic real nonfinancial sector by the central
bank as a share of GDP | 2008
RANK COUNTRY/ECONOMY SCORE
1 Egypt...................................23.78
2 Brazil....................................13.33
3 Japan...................................12.27
4 Panama ...............................12.02
5 Philippines.............................6.94
6 Indonesia...............................6.31
7 Australia.................................6.17
8 Bangladesh............................6.10
9 Pakistan.................................6.04
10 Argentina...............................5.80
11 United States ........................5.26
12 Italy .......................................4.52
13 Jordan ...................................4.04
14 Canada ..................................3.13
15 Thailand .................................2.76
16 Singapore ..............................2.24
17 India.......................................2.15
18 Morocco................................2.03
19 Turkey ....................................1.78
20 United Kingdom.....................1.70
21 Korea, Rep. ............................1.66
22 Chile ......................................1.63
23 Austria ...................................1.42
24 Nigeria ...................................1.35
25 Spain......................................1.25
26 Vietnam .................................1.21
27 Switzerland ............................1.17
28 France ...................................0.86
29 Russian Federation................0.83
30 Malaysia ................................0.79
31 Belgium .................................0.72
32 Hungary ................................0.59
33 South Africa ..........................0.55
34 Venezuela ..............................0.44
35 Colombia ...............................0.38
36 Denmark ...............................0.36
37 Netherlands...........................0.22
38 Germany................................0.18
39 Kazakhstan ............................0.14
40 Slovak Republic .....................0.02
n/a Bahrain ....................................n/a
n/a China .......................................n/a
n/a Czech Republic........................n/a
n/a Finland.....................................n/a
n/a Hong Kong SAR ......................n/a
n/a Ireland .....................................n/a
n/a Israel........................................n/a
n/a Kuwait .....................................n/a
n/a Mexico ....................................n/a
n/a Norway....................................n/a
n/a Peru .........................................n/a
n/a Poland......................................n/a
n/a Romania ..................................n/a
n/a Saudi Arabia ............................n/a
n/a Sweden ...................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
4.03
Financial system deposits to GDP
This variable shows the demand, time, and saving deposits in
deposit-money banks and other financial institutions as a share of
GDP | 2008
RANK COUNTRY/ECONOMY SCORE
1 Hong Kong SAR ................285.19
2 Japan.................................182.69
3 Switzerland ........................157.73
4 United Kingdom.................151.55
5 Spain .................................135.97
6 Netherlands.......................122.81
7 Singapore...........................115.93
8 Canada...............................114.77
9 Malaysia ............................109.42
10 Jordan................................108.24
11 Germany............................103.58
12 Australia ...............................97.58
13 Belgium................................97.02
14 Ireland .................................96.90
15 Austria .................................89.29
16 Israel ...................................86.90
17 Morocco..............................85.89
18 Thailand ...............................84.48
19 Panama ...............................82.91
20 United States.......................77.91
21 Egypt ...................................76.53
22 Vietnam ...............................73.55
23 France .................................68.27
24 Italy......................................68.12
25 Denmark ..............................67.03
26 South Africa ........................63.35
27 India ....................................63.25
28 Czech Republic ....................61.51
29 Brazil ...................................59.96
30 Kuwait .................................58.93
31 Korea, Rep...........................55.76
32 Sweden ...............................52.33
33 Chile .....................................51.74
34 Philippines ...........................51.03
35 Finland.................................50.60
36 Norway................................50.60
37 Bangladesh .........................50.53
38 Slovak Republic ...................48.52
39 Hungary ...............................47.17
40 Saudi Arabia ........................45.42
41 Poland .................................40.41
42 Turkey..................................39.94
43 Pakistan...............................36.05
44 Indonesia.............................33.65
45 Kazakhstan ..........................31.87
46 Russian Federation ..............31.73
47 Venezuela ............................30.08
48 Romania ..............................29.38
49 Peru .....................................24.26
50 Mexico ................................22.13
51 Colombia .............................20.97
52 Nigeria.................................20.33
53 Argentina.............................20.13
n/a Bahrain ....................................n/a
n/a China .......................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
4.04
3: Data Tables | Banking financial services
M2 to GDP
This variable is the money and quasi-money supply as a percentage
of GDP | 2009
RANK COUNTRY/ECONOMY SCORE
1 Hong Kong SAR ................329.54
2 China..................................181.96
3 Spain ..................................167.39
4 Japan .................................159.10
5 Switzerland........................154.64
6 Malaysia ............................146.69
7 United Kingdom ................146.47
8 Jordan ...............................145.50
9 Singapore ..........................144.08
10 Netherlands .......................139.10
11 Germany............................125.31
12 Vietnam .............................122.72
13 Ireland ................................121.10
14 Thailand ..............................117.27
15 Belgium .............................114.07
16 Austria ...............................105.27
17 Morocco ............................102.13
18 Australia ..............................99.36
19 Bahrain ................................93.65
20 Panama ...............................88.15
21 United Arab Emirates ..........87.69
22 India .....................................87.69
337
23 Italy ......................................87.14
24 France..................................86.16
25 Canada ................................85.55
26 Egypt...................................82.21
27 Kuwait ..................................77.19
28 Saudi Arabia ........................75.05
29 Denmark .............................73.63
30 Korea, Rep. .........................72.66
31 Czech Republic ....................71.34
32 Finland.................................70.75
33 South Africa ........................69.44
34 Sweden................................67.04
35 Norway................................63.52
36 United States ......................59.97
37 Slovak Republic ...................59.72
38 Chile ....................................56.45
39 Hungary...............................55.19
40 Ukraine................................53.82
41 Israel ...................................53.75
42 Poland .................................53.29
43 Bangladesh .........................50.40
44 Philippines...........................48.59
45 Kazakhstan...........................47.52
46 Pakistan...............................40.64
47 Russian Federation..............40.23
48 Nigeria.................................39.82
49 Romania ..............................38.27
50 Indonesia.............................38.10
51 Brazil ....................................37.14
52 Colombia .............................36.01
53 Peru .....................................34.38
54 Turkey..................................32.86
55 Venezuela.............................31.74
56 Mexico ................................30.55
57 Argentina .............................27.60
SOURCES: M2 supply data from the Economist Intelligence Unit
CountryData Database, data retrieved August 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
 3: Data Tables | Banking financial services
4.05
Private credit to GDP
This variable shows private credit by deposit-money banks and other
financial institutions as a percentage of GDP | 2008
RANK COUNTRY/ECONOMY SCORE
1 United States ....................210.73
2 Denmark ...........................209.82
3 Ireland ...............................205.76
4 Netherlands.......................192.60
5 United Kingdom ................189.56
6 Spain .................................188.49
7 Switzerland ........................174.81
8 South Africa.......................162.42
9 Canada ..............................134.03
10 Hong Kong SAR ................126.48
11 Sweden .............................124.08
12 Australia .............................121.43
13 Austria ................................111.58
14 France ................................106.74
15 Italy....................................103.33
16 Germany ............................102.17
17 Norway...............................101.96
18 Malaysia ..............................96.39
19 Japan...................................94.88
20 Jordan .................................94.18
21 Belgium ...............................93.70
22 Singapore ............................90.91
338
23 Vietnam ...............................90.56
24 Korea, Rep. .........................89.84
25 Israel ...................................86.58
26 Chile ....................................86.48
27 Panama ...............................80.58
28 Finland.................................80.54
29 Thailand................................77.90
30 Kuwait ..................................74.19
31 Morocco..............................69.81
32 Hungary ..............................64.21
33 Kazakhstan ..........................64.20
34 Brazil ...................................54.49
35 Czech Republic....................48.42
36 India .....................................47.91
37 Colombia .............................42.96
38 Slovak Republic ...................42.51
39 Egypt....................................41.01
40 Poland .................................40.55
41 Russian Federation..............38.97
42 Saudi Arabia ........................38.44
43 Romania ..............................36.87
44 Bangladesh .........................35.88
45 Turkey..................................30.83
46 Pakistan ...............................27.62
47 Philippines ............................27.11
48 Venezuela ............................26.64
49 Nigeria.................................24.59
50 Mexico ................................23.48
51 Indonesia.............................22.80
52 Peru .....................................19.81
53 Argentina.............................13.98
n/a Bahrain ....................................n/a
n/a China .......................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
4.06
Bank deposits to GDP
This variable shows the demand, time, and savings deposits in
deposit-money banks as a share of GDP | 2008
RANK COUNTRY/ECONOMY SCORE
1 Hong Kong SAR ................289.12
2 Japan .................................183.10
3 United Kingdom ................153.63
4 China .................................144.78
5 Spain .................................136.95
6 Switzerland ........................133.17
7 Netherlands .......................121.99
8 Canada...............................116.48
9 Singapore...........................112.61
10 Malaysia ............................109.44
11 Jordan ................................108.11
12 Germany............................103.60
13 Australia ..............................98.15
14 Belgium................................97.00
15 Ireland .................................96.13
16 Austria .................................89.03
17 Israel ...................................86.89
18 Morocco..............................85.25
19 Thailand ...............................84.06
20 Panama ...............................83.00
21 Bahrain ................................79.29
22 United States ......................78.26
23 Egypt ...................................76.43
24 Vietnam ...............................73.70
25 France .................................68.29
26 Denmark ..............................67.29
27 Italy ......................................67.26
28 United Arab Emirates..........66.40
29 South Africa ........................63.41
30 India ....................................63.20
31 Czech Republic ....................61.35
32 Korea, Rep. .........................60.94
33 Brazil ...................................60.66
34 Kuwait .................................60.27
35 Sweden ...............................52.58
36 Chile ....................................52.11
37 Finland.................................50.73
38 Bangladesh .........................50.34
39 Slovak Republic ...................48.56
40 Hungary ...............................47.14
41 Philippines...........................45.77
42 Saudi Arabia ........................45.36
43 Poland .................................40.34
44 Turkey..................................39.79
45 Pakistan...............................35.26
46 Indonesia.............................33.66
47 Kazakhstan ..........................32.26
48 Russian Federation..............30.87
49 Venezuela ............................30.67
50 Romania ..............................29.33
51 Ukraine................................25.86
52 Peru .....................................24.25
53 Mexico.................................21.94
54 Colombia .............................21.05
55 Nigeria.................................20.84
56 Argentina.............................20.07
n/a Norway....................................n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
4.07
Money market instruments to GDP
This variable is total money market instruments (US$ billions) as a
percentage of GDP | 2009
RANK COUNTRY/ECONOMY SCORE
1 Ireland .................................43.55
2 Netherlands .........................11.00
3 Sweden ...............................10.48
4 United Kingdom...................10.11
5 Belgium .................................6.66
6 Finland...................................6.56
7 Australia ................................5.04
8 Denmark ...............................4.67
9 Austria ...................................3.90
10 Spain .....................................3.05
11 Germany ................................2.74
12 France ...................................2.53
13 Norway ..................................1.89
14 Singapore...............................1.13
15 Hong Kong SAR.....................1.07
16 Korea, Rep. ...........................0.81
17 United Arab Emirates............0.51
18 United States ........................0.43
19 Canada ..................................0.14
20 Brazil .....................................0.07
21 Japan.....................................0.05
22 Switzerland............................0.04
23 Argentina...............................0.02
24 Mexico...................................0.01
25 Italy .......................................0.00
26 Bahrain ..................................0.00
26 Bangladesh ...........................0.00
26 Chile ......................................0.00
26 China .....................................0.00
26 Colombia ...............................0.00
26 Czech Republic......................0.00
26 Egypt.....................................0.00
26 Hungary ................................0.00
26 India ......................................0.00
26 Indonesia...............................0.00
26 Israel .....................................0.00
26 Jordan ...................................0.00
26 Kazakhstan............................0.00
26 Kuwait ...................................0.00
26 Malaysia ................................0.00
26 Morocco................................0.00
26 Nigeria...................................0.00
26 Pakistan.................................0.00
26 Panama .................................0.00
26 Peru.......................................0.00
26 Philippines.............................0.00
26 Poland ...................................0.00
26 Romania ................................0.00
26 Russian Federation ...............0.00
26 Slovak Republic.....................0.00
26 South Africa ..........................0.00
26 Thailand.................................0.00
26 Turkey....................................0.00
26 Ukraine..................................0.00
26 Venezuela..............................0.00
26 Vietnam.................................0.00
n/a Saudi Arabia ............................n/a
SOURCES: Bank for International Settlements, Quarterly Review June
2010; GDP data from the IMF, World Economic Outlook Database
(April 2010)
4.08
3: Data Tables | Banking financial services
Aggregate profitability indicator
This variable is based on a three-year average of three measures of
profitability: net interest margin, bank return on assets, and bank
return on equity | 2006–08
RANK COUNTRY/ECONOMY SCORE
1 Netherlands...........................6.49
2 Belgium .................................6.31
3 United Arab Emirates............6.29
4 Saudi Arabia ..........................6.18
5 Kuwait ...................................6.13
6 Bahrain ..................................6.02
7 Bangladesh ...........................5.22
8 Singapore ..............................5.20
9 Australia ................................5.12
10 Panama .................................5.06
11 Vietnam .................................5.05
12 Finland...................................5.00
13 Egypt.....................................4.84
14 Hong Kong SAR ....................4.75
15 Nigeria ...................................4.74
16 Turkey ....................................4.74
17 Czech Republic......................4.71
18 Venezuela ..............................4.69
19 South Africa ..........................4.65
20 Switzerland............................4.64
21 Malaysia ................................4.60
22 Spain .....................................4.59
339
23 India ......................................4.50
24 Korea, Rep. ...........................4.49
25 China .....................................4.46
26 Poland ...................................4.46
27 Slovak Republic .....................4.40
28 Morocco................................4.39
29 Israel .....................................4.37
30 Canada ..................................4.27
31 Jordan ...................................4.25
32 Denmark ...............................4.21
33 France ...................................4.20
34 Austria ...................................4.12
35 Norway..................................4.06
36 Sweden .................................4.01
37 Brazil .....................................3.92
38 Kazakhstan ............................3.88
39 Indonesia ...............................3.76
40 Germany ................................3.74
41 Colombia ...............................3.64
42 United Kingdom ....................3.61
43 Russian Federation................3.52
44 Italy .......................................3.40
45 Ireland ...................................3.40
46 United States ........................3.20
47 Ukraine ..................................3.19
48 Japan.....................................3.05
49 Philippines.............................3.03
50 Pakistan.................................2.97
51 Peru .......................................2.67
52 Argentina...............................2.44
53 Romania ................................2.41
54 Hungary ................................2.39
55 Chile ......................................2.34
56 Thailand .................................2.28
57 Mexico...................................1.32
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
 3: Data Tables | Banking financial services
4.09
Bank overhead costs
This is bank overhead costs as a percentage of total assets | 2008
RANK COUNTRY/ECONOMY SCORE
1 Singapore ..............................0.55
2 Vietnam .................................0.84
3 China .....................................0.97
4 Finland ...................................1.03
5 Spain......................................1.09
6 Norway ..................................1.14
7 United Arab Emirates ............1.29
8 Hong Kong SAR.....................1.32
9 Japan .....................................1.32
10 Korea, Rep. ............................1.37
11 Morocco ................................1.40
12 Saudi Arabia...........................1.40
13 Sweden .................................1.43
14 United Kingdom.....................1.43
15 Australia.................................1.57
16 India .......................................1.61
17 Malaysia.................................1.67
18 Thailand .................................1.86
19 Italy........................................1.98
20 Czech Republic......................2.06
21 Kuwait ...................................2.06
22 Jordan ...................................2.07
340
23 Ireland ...................................2.09
24 Pakistan .................................2.10
25 Canada ..................................2.10
26 Israel .....................................2.23
27 Slovak Republic .....................2.33
28 Bangladesh ...........................2.39
29 Philippines.............................2.49
30 Denmark ...............................2.51
31 Poland ...................................2.53
32 France ...................................2.65
33 Egypt.....................................2.83
34 Indonesia...............................2.90
35 Kazakhstan ............................3.04
36 Chile ......................................3.07
37 Austria ...................................3.24
38 Bahrain ..................................3.50
39 United States ........................3.54
40 Nigeria...................................3.63
41 Belgium .................................3.68
42 Ukraine..................................3.69
43 Switzerland............................3.71
44 Turkey....................................3.89
45 Peru .......................................4.42
46 South Africa ..........................4.43
47 Panama .................................4.66
48 Venezuela ..............................4.85
49 Germany ...............................4.96
50 Netherlands...........................5.26
51 Colombia ...............................5.35
52 Romania ................................6.79
53 Russian Federation ................7.58
54 Argentina................................7.74
55 Brazil....................................10.36
56 Hungary...............................16.62
57 Mexico ................................20.89
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
4.10
Public ownership of banks
This variable is the percentage of assets held by the 10 largest banks
that is located in banks that are more than 25 percent government-
owned | 2009 or most recent available
RANK COUNTRY/ECONOMY SCORE
1 Austria...................................0.00
1 Belgium.................................0.00
1 Canada ..................................0.00
1 Colombia ...............................0.00
1 Czech Republic......................0.00
1 Denmark ...............................0.00
1 Finland...................................0.00
1 France ...................................0.00
1 Hong Kong SAR ....................0.00
1 Israel .....................................0.00
1 Japan.....................................0.00
1 Jordan ...................................0.00
1 Kazakhstan............................0.00
1 Nigeria...................................0.00
1 Pakistan.................................0.00
1 Panama .................................0.00
1 Singapore ..............................0.00
1 South Africa ..........................0.00
1 Spain .....................................0.00
20 Slovak Republic .....................0.65
21 Netherlands...........................2.32
22 Australia ................................2.87
23 Sweden .................................3.01
24 Mexico ..................................3.27
25 Hungary ................................3.86
26 Switzerland............................4.80
27 Thailand .................................5.57
28 Peru .......................................6.55
29 Germany ................................7.61
30 Romania .................................7.76
31 Norway ..................................7.94
32 Italy........................................8.10
33 Morocco................................9.36
34 Venezuela ............................10.83
35 Argentina..............................11.67
36 Ukraine.................................11.91
37 United States ......................13.25
38 Philippines ...........................16.08
39 Bahrain .................................17.33
40 Chile ....................................18.48
41 Korea, Rep. ..........................21.04
42 United Kingdom ..................24.81
43 Turkey..................................26.27
44 Kuwait .................................26.73
45 Poland ..................................27.98
46 Ireland .................................28.20
47 Saudi Arabia.........................31.69
48 Russian Federation ..............37.87
49 Brazil ...................................38.08
50 Malaysia ..............................39.92
51 China ...................................52.16
52 Indonesia.............................56.51
53 United Arab Emirates..........58.18
54 Bangladesh .........................58.73
55 Egypt...................................62.35
56 India .....................................67.31
57 Vietnam ...............................69.06
SOURCE: BankScope database, data retrieved July 2010
4.11
Bank operating costs to assets
This is non-interest expense as a percentage of average assets in
last reported year | 2009 or most recent available
RANK COUNTRY/ECONOMY SCORE
1 Ireland ...................................0.56
2 China .....................................0.74
3 Germany ...............................0.86
4 Denmark ...............................0.87
5 Belgium .................................0.87
6 Japan.....................................0.87
7 Norway..................................0.94
8 Sweden .................................0.95
9 France ....................................1.06
10 Singapore ..............................1.07
11 Finland ...................................1.10
12 Netherlands............................1.11
13 Bahrain...................................1.13
14 Hong Kong SAR.....................1.16
15 United Kingdom.....................1.21
16 United Arab Emirates ............1.24
17 Australia.................................1.31
18 Saudi Arabia...........................1.36
19 Spain......................................1.41
20 Kuwait....................................1.49
21 Kazakhstan ............................1.53
22 Italy........................................1.56
23 Egypt .....................................1.56
24 Austria ...................................1.62
25 Jordan....................................1.66
26 Malaysia.................................1.75
27 Switzerland ............................1.75
28 Canada...................................1.91
29 Czech Republic ......................1.92
30 Vietnam .................................1.97
31 Korea, Rep. ...........................2.23
32 Slovak Republic .....................2.31
33 Morocco................................2.32
34 Thailand .................................2.36
35 United States ........................2.38
36 Chile ......................................2.46
37 India ......................................2.57
38 Bangladesh ...........................2.61
39 Russian Federation ................2.74
40 Turkey....................................2.80
41 South Africa ..........................2.84
42 Pakistan.................................2.84
43 Poland ...................................2.93
44 Mexico ..................................3.09
45 Philippines.............................3.26
46 Romania ................................3.27
47 Israel .....................................3.31
48 Indonesia...............................3.69
49 Panama .................................3.71
50 Brazil .....................................4.02
51 Ukraine..................................4.05
52 Peru .......................................4.18
53 Venezuela ..............................5.68
54 Colombia ...............................5.69
55 Nigeria...................................5.83
56 Hungary ................................5.85
57 Argentina ...............................7.00
SOURCE: BankScope database, data retrieved July 2010
4.12
3: Data Tables | Banking financial services
Non-performing bank loans to total loans
This variable is the percentage of non-performing bank loans relative
to total number of loans outstanding | 2009
RANK COUNTRY/ECONOMY SCORE
1 Australia .................................1.10
1 Norway ..................................1.10
3 Canada...................................1.20
4 Panama..................................1.40
5 Hong Kong SAR.....................1.50
5 Israel ......................................1.50
7 China .....................................1.60
8 Japan .....................................1.80
9 Sweden .................................2.00
10 Austria ...................................2.30
10 Singapore ..............................2.30
12 India ......................................2.40
13 Venezuela ..............................2.60
14 Belgium .................................2.70
14 Peru .......................................2.70
16 Argentina ...............................3.10
17 United Kingdom ....................3.30
18 Mexico ..................................3.40
19 Indonesia...............................3.80
19 Malaysia ................................3.80
21 Slovak Republic .....................4.30
22 Brazil .....................................4.50
341
23 Colombia ...............................4.60
23 United Arab Emirates............4.60
25 Spain .....................................5.10
26 Czech Republic......................5.30
27 United States ........................5.40
28 Morocco................................5.50
28 South Africa ..........................5.50
30 Turkey....................................5.70
31 Hungary ................................5.90
32 Italy .......................................6.20
33 Jordan ...................................6.40
34 Nigeria...................................6.60
35 Poland ....................................7.00
36 Ireland ....................................7.50
37 Pakistan...............................12.20
38 Egypt ...................................14.70
39 Romania ..............................14.80
40 Kazakhstan ..........................21.20
41 Ukraine................................33.80
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Chile ........................................n/a
n/a Denmark..................................n/a
n/a Finland.....................................n/a
n/a France......................................n/a
n/a Germany..................................n/a
n/a Korea, Rep...............................n/a
n/a Kuwait .....................................n/a
n/a Netherlands.............................n/a
n/a Philippines ...............................n/a
n/a Russian Federation..................n/a
n/a Saudi Arabia ............................n/a
n/a Switzerland..............................n/a
n/a Thailand ...................................n/a
n/a Vietnam ...................................n/a
SOURCE: IMF, Global Financial Stability Report, October 2010
 3: Data Tables | Banking financial services
4.13
Private credit bureau coverage
This variable is the percentage of adults covered by a private credit
registry | 2009
RANK COUNTRY/ECONOMY SCORE
1 Argentina...........................100.00
1 Australia ............................100.00
1 Canada ..............................100.00
1 Ireland ...............................100.00
1 Norway..............................100.00
1 Sweden .............................100.00
1 United Kingdom ................100.00
1 United States ....................100.00
9 Germany .............................98.30
10 Korea, Rep. .........................93.80
11 Israel ...................................89.80
12 Netherlands.........................83.50
13 Malaysia ..............................82.00
14 Italy ......................................77.50
14 Mexico .................................77.50
16 Japan ...................................76.20
17 Czech Republic ....................73.10
18 Hong Kong SAR...................71.90
19 Poland .................................68.30
20 Colombia .............................60.50
21 Brazil ...................................59.20
22 South Africa ........................54.70
342
23 Panama ...............................45.90
24 Slovak Republic...................44.00
25 Turkey..................................42.90
26 Singapore ............................40.30
27 Austria .................................39.20
28 Bahrain ................................34.90
29 Chile ....................................33.90
30 Thailand ...............................32.90
31 Peru .....................................31.80
32 Kuwait .................................30.40
33 Romania ..............................30.20
34 Kazakhstan ..........................29.50
35 Switzerland..........................22.50
36 Saudi Arabia .........................17.90
37 Finland.................................14.70
38 Russian Federation..............14.30
39 Morocco ..............................14.00
40 United Arab Emirates ..........12.60
41 Hungary...............................10.30
42 India.....................................10.20
43 Egypt.....................................8.20
44 Spain ......................................7.60
45 Philippines .............................6.10
46 Denmark ...............................5.20
47 Ukraine..................................3.00
48 Pakistan .................................1.50
49 Bangladesh ...........................0.00
49 Belgium.................................0.00
49 China .....................................0.00
49 France ...................................0.00
49 Indonesia...............................0.00
49 Jordan ...................................0.00
49 Nigeria...................................0.00
49 Venezuela..............................0.00
49 Vietnam.................................0.00
SOURCE: The World Bank, Doing Business 2010
4.14
Public credit registry coverage
This variable is the percentage of adults covered by a public credit
registry | 2009
RANK COUNTRY/ECONOMY SCORE
1 China ...................................62.10
2 Belgium ...............................56.50
3 Malaysia ..............................48.50
4 Spain ...................................45.30
5 Argentina.............................34.30
6 Chile ....................................32.90
7 France .................................32.50
8 Brazil ...................................23.70
9 Peru.....................................23.00
10 Indonesia.............................22.00
11 Vietnam ...............................19.00
12 Turkey ..................................15.90
13 Italy......................................12.20
14 United Arab Emirates ............7.30
15 Romania ................................5.70
16 Pakistan.................................5.60
17 Czech Republic......................4.90
18 Egypt.....................................2.50
19 Austria ...................................1.40
19 Slovak Republic .....................1.40
21 Jordan....................................1.00
22 Bangladesh ...........................0.90
23 Germany ...............................0.80
24 Australia ................................0.00
24 Bahrain ..................................0.00
24 Canada ..................................0.00
24 Colombia ...............................0.00
24 Denmark ...............................0.00
24 Finland...................................0.00
24 Hong Kong SAR ....................0.00
24 Hungary ................................0.00
24 India ......................................0.00
24 Ireland ...................................0.00
24 Israel .....................................0.00
24 Japan.....................................0.00
24 Kazakhstan............................0.00
24 Korea, Rep. ...........................0.00
24 Kuwait ...................................0.00
24 Mexico ..................................0.00
24 Morocco................................0.00
24 Netherlands...........................0.00
24 Nigeria...................................0.00
24 Norway .................................0.00
24 Panama .................................0.00
24 Philippines.............................0.00
24 Poland ...................................0.00
24 Russian Federation ...............0.00
24 Saudi Arabia ..........................0.00
24 Singapore ..............................0.00
24 South Africa ..........................0.00
24 Sweden .................................0.00
24 Switzerland ...........................0.00
24 Thailand.................................0.00
24 Ukraine..................................0.00
24 United Kingdom ....................0.00
24 United States ........................0.00
24 Venezuela..............................0.00
SOURCE: The World Bank, Doing Business 2010
Data Tables

Section V
Non-banking financial services
 3: Data Tables | Non-banking financial services
5.01
IPO market share
This is the three-year average of percentage of world initial public
offerings (IPOs) issued in a given country as measured by US dollars
| 2007–09
RANK COUNTRY/ECONOMY HARD DATA
1 China ...................................22.02
2 United States.......................21.25
3 Brazil....................................10.46
4 United Kingdom ....................4.40
5 Russian Federation ...............4.00
6 India ......................................3.92
7 Spain .....................................3.32
8 Germany ...............................2.38
9 Australia ................................2.05
10 Japan .....................................1.60
11 Canada...................................1.55
12 Italy........................................1.37
13 Poland ....................................1.23
14 France ....................................1.20
15 Singapore ..............................1.20
16 United Arab Emirates ............1.19
17 Turkey ....................................1.09
18 Indonesia ...............................1.08
19 Korea, Rep. ............................1.03
20 Hong Kong SAR.....................1.02
21 Malaysia ................................0.95
22 Austria ...................................0.88
344
23 Belgium .................................0.88
24 Mexico ..................................0.85
25 Kazakhstan ............................0.83
26 Israel .....................................0.80
27 Netherlands...........................0.70
28 Colombia ...............................0.68
29 Ireland ...................................0.63
30 Czech Republic......................0.56
31 Norway..................................0.51
32 Ukraine..................................0.45
33 Switzerland............................0.40
34 Argentina...............................0.36
35 Philippines.............................0.33
36 Nigeria...................................0.30
37 Morocco................................0.28
38 Egypt.....................................0.27
39 South Africa ..........................0.27
40 Sweden .................................0.27
41 Thailand .................................0.23
42 Saudi Arabia ..........................0.22
43 Vietnam .................................0.18
44 Kuwait ...................................0.16
45 Finland...................................0.15
46 Peru .......................................0.11
47 Denmark................................0.10
48 Chile ......................................0.08
49 Jordan ...................................0.07
50 Romania ................................0.05
51 Pakistan.................................0.04
52 Hungary ................................0.04
53 Bangladesh ...........................0.03
n/a Bahrain ....................................n/a
n/a Panama....................................n/a
n/a Slovak Republic .......................n/a
n/a Venezuela ................................n/a
SOURCE: Dealogic Analytics, data retrieved July 2010
5.02
IPO proceeds amount
This is the three-year average of total initial public offering (IPO)
proceeds as a percentage of GDP | 2007–09
RANK COUNTRY/ECONOMY HARD DATA
1 Kazakhstan.............................1.12
2 Brazil ......................................1.09
3 Singapore ..............................1.06
4 China .....................................0.82
5 United Arab Emirates............0.81
6 Hong Kong SAR ....................0.77
7 Malaysia ................................0.75
8 Israel .....................................0.67
9 India ......................................0.53
10 Morocco................................0.52
11 Jordan ...................................0.51
12 Ukraine..................................0.49
13 Colombia ...............................0.48
14 Russian Federation................0.45
15 Czech Republic......................0.45
16 Poland ...................................0.42
17 Ireland ...................................0.40
18 Austria ...................................0.36
19 Spain .....................................0.35
20 Indonesia...............................0.34
21 Vietnam .................................0.34
22 Philippines.............................0.33
23 Australia ................................0.32
24 Belgium .................................0.29
25 United Kingdom ....................0.27
26 Egypt.....................................0.27
27 Nigeria...................................0.26
28 Turkey....................................0.26
29 United States ........................0.24
30 Norway..................................0.20
31 Kuwait ...................................0.19
32 Argentina...............................0.19
33 Korea, Rep.............................0.17
34 Canada ..................................0.17
35 South Africa...........................0.15
36 Peru .......................................0.14
37 Thailand .................................0.14
38 Netherlands...........................0.14
39 Mexico ..................................0.14
40 Switzerland............................0.13
41 Germany ................................0.11
42 Italy........................................0.10
43 Finland ...................................0.10
44 Sweden .................................0.09
45 Saudi Arabia ..........................0.08
46 Chile ......................................0.08
47 France ...................................0.07
48 Bangladesh ...........................0.06
49 Japan.....................................0.05
50 Denmark ...............................0.05
51 Romania ................................0.05
52 Hungary ................................0.05
53 Pakistan.................................0.04
n/a Bahrain ....................................n/a
n/a Panama....................................n/a
n/a Slovak Republic .......................n/a
n/a Venezuela ................................n/a
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
5.03
Share of world IPOs
This is the three-year average of the number of initial public offering
(IPO) issues as a percentage of total global number of issues |
2007–09
RANK COUNTRY/ECONOMY HARD DATA
1 China ...................................12.57
2 United States .......................11.39
3 Canada ................................10.09
4 Japan.....................................6.40
5 Poland ...................................6.00
6 Korea, Rep.............................5.76
7 India ......................................5.50
8 United Kingdom ....................5.33
9 Australia ................................5.03
10 Brazil .....................................2.55
11 France ...................................2.25
12 Malaysia ................................2.18
13 Singapore ..............................2.14
14 Israel......................................2.01
15 Germany ................................1.84
15 Hong Kong SAR.....................1.84
17 South Africa ...........................1.58
18 Italy........................................1.54
19 Indonesia ...............................1.51
20 Thailand .................................1.31
21 Belgium .................................1.04
22 Bangladesh ............................0.74
23 Russian Federation................0.70
24 Norway..................................0.54
24 Sweden .................................0.54
26 Morocco................................0.50
26 Philippines.............................0.50
28 Spain .....................................0.47
29 Denmark ...............................0.44
29 Switzerland............................0.44
29 Ukraine..................................0.44
32 Saudi Arabia ..........................0.37
33 Netherlands...........................0.34
33 Nigeria...................................0.34
33 Pakistan.................................0.34
33 Turkey....................................0.34
37 United Arab Emirates............0.30
38 Ireland ...................................0.27
38 Romania ................................0.27
40 Austria ...................................0.23
40 Kazakhstan ............................0.23
40 Mexico ..................................0.23
40 Vietnam .................................0.23
44 Argentina...............................0.20
44 Chile ......................................0.20
46 Czech Republic ......................0.17
46 Jordan....................................0.17
48 Colombia ...............................0.13
48 Finland...................................0.13
48 Peru .......................................0.13
51 Egypt .....................................0.10
51 Kuwait ...................................0.10
53 Hungary ................................0.03
n/a Bahrain ....................................n/a
n/a Panama....................................n/a
n/a Slovak Republic .......................n/a
n/a Venezuela ................................n/a
SOURCE: Dealogic Analytics, data retrieved July 2010
5.04
3: Data Tables | Non-banking financial services
M&A market share
This is the three-year average of the dollar value of mergers and
acquisitions (M&As) occurring in a given country as a percentage of
the total global value | 2007–09
RANK COUNTRY/ECONOMY HARD DATA
1 United States ......................36.00
2 United Kingdom ....................9.26
3 Germany ...............................4.56
4 Japan.....................................4.16
5 Canada ..................................4.14
6 China .....................................3.91
7 France ...................................3.61
8 Spain .....................................3.54
9 Netherlands...........................3.36
10 Russian Federation................3.13
11 Australia ................................3.04
12 Italy .......................................2.99
13 Brazil ......................................1.79
14 Switzerland ............................1.57
15 Korea, Rep. ............................1.45
16 India .......................................1.21
17 Sweden..................................1.13
18 Norway..................................0.99
19 Belgium .................................0.97
20 South Africa ..........................0.73
21 Hong Kong SAR ....................0.72
22 Malaysia ................................0.66
345
23 Singapore ..............................0.65
24 Austria ...................................0.49
25 Mexico ..................................0.46
26 Turkey....................................0.43
27 Indonesia...............................0.39
28 Ireland ...................................0.38
29 Denmark ...............................0.35
30 Egypt.....................................0.34
31 Philippines.............................0.33
32 Poland ...................................0.32
33 Finland...................................0.30
34 Kazakhstan ............................0.27
35 Chile ......................................0.25
36 Israel .....................................0.20
37 Hungary ................................0.20
38 Czech Republic......................0.19
39 Colombia ...............................0.19
40 Thailand .................................0.16
41 United Arab Emirates ............0.16
42 Ukraine ..................................0.15
43 Saudi Arabia ..........................0.12
44 Argentina ...............................0.11
45 Romania ................................0.11
46 Kuwait ...................................0.09
47 Venezuela ..............................0.08
48 Peru .......................................0.06
49 Morocco................................0.06
50 Pakistan.................................0.05
51 Nigeria...................................0.05
52 Vietnam .................................0.05
53 Bahrain ..................................0.05
54 Jordan ...................................0.03
55 Slovak Republic .....................0.02
56 Panama..................................0.01
57 Bangladesh............................0.01
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
 3: Data Tables | Non-banking financial services
5.05
M&A transaction value to GDP
This variable is the rank value of the three-year average of mergers
and acquisitions (M&A) transactions in US dollars (including the net
debt of the target) as a percentage of GDP | 2007–09
RANK COUNTRY/ECONOMY HARD DATA
1 Netherlands .........................14.16
2 Singapore ............................12.58
3 United Kingdom ..................12.47
4 Hong Kong SAR....................11.74
5 Malaysia ...............................11.36
6 Switzerland ..........................11.34
7 Australia...............................10.45
8 Canada ................................10.03
9 South Africa ..........................8.88
10 Sweden .................................8.73
11 United States ........................8.69
12 Norway..................................8.37
13 Spain .....................................8.10
14 Bahrain...................................7.86
15 Kazakhstan.............................7.84
16 Russian Federation ................7.72
17 Egypt......................................7.34
18 Philippines..............................7.21
19 Belgium .................................6.97
20 Korea, Rep. ...........................5.34
21 Ireland ...................................5.15
22 Chile ......................................5.10
346
23 Hungary ................................4.85
24 Italy .......................................4.72
25 Jordan ...................................4.70
26 France ...................................4.58
27 Germany ...............................4.55
28 Austria ...................................4.31
29 Finland...................................4.16
30 Brazil .....................................4.03
31 Denmark ...............................3.73
32 Israel .....................................3.66
33 Ukraine..................................3.59
34 India ......................................3.53
35 Czech Republic......................3.38
36 China .....................................3.15
37 Japan.....................................3.00
38 Colombia ...............................2.87
39 Indonesia...............................2.71
40 Kuwait ...................................2.51
41 Poland ...................................2.42
42 United Arab Emirates............2.29
43 Morocco................................2.24
44 Turkey....................................2.23
45 Thailand .................................2.13
46 Romania ................................2.08
47 Vietnam .................................1.87
48 Peru .......................................1.75
49 Mexico...................................1.60
50 Panama..................................1.56
51 Argentina ...............................1.28
52 Pakistan .................................1.08
53 Saudi Arabia...........................1.02
54 Venezuela ..............................0.91
55 Slovak Republic .....................0.89
56 Nigeria...................................0.88
57 Bangladesh ...........................0.24
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
5.06
Share of total number of M&A deals
This is the three-year average of the percentage of world mergers
and acquisitions (M&A) deals occurring in a given country as meas-
ured by the share of the total number of global M&A deals | 2007–09
RANK COUNTRY/ECONOMY HARD DATA
1 United States ......................22.96
2 Japan.....................................8.82
3 China .....................................8.60
4 United Kingdom.....................7.44
5 Canada ..................................4.51
6 Australia ................................4.20
7 Germany ...............................3.93
8 Russian Federation................3.63
9 Korea, Rep. ...........................3.53
10 France....................................3.15
11 India.......................................3.10
12 Spain .....................................2.43
13 Malaysia ................................2.03
14 Sweden .................................2.02
15 Italy........................................1.93
16 Hong Kong SAR.....................1.38
17 Netherlands ...........................1.34
18 Singapore...............................1.14
19 Switzerland ............................1.10
20 Brazil ......................................1.06
21 Poland ...................................0.93
22 Norway..................................0.83
23 Denmark ................................0.74
24 South Africa ..........................0.73
25 Ukraine..................................0.72
26 Thailand .................................0.68
27 Belgium .................................0.62
28 Indonesia...............................0.60
29 Austria ...................................0.53
29 Finland...................................0.53
31 Mexico ..................................0.40
32 Ireland ...................................0.37
33 Czech Republic......................0.34
34 Philippines.............................0.33
35 Vietnam .................................0.31
36 Israel .....................................0.29
37 Chile ......................................0.29
38 Romania ................................0.28
39 Turkey....................................0.27
40 Argentina...............................0.27
41 Hungary ................................0.23
42 Colombia ...............................0.22
43 Peru .......................................0.19
44 United Arab Emirates............0.18
45 Egypt .....................................0.12
46 Kazakhstan ............................0.11
47 Slovak Republic .....................0.10
48 Pakistan.................................0.07
49 Saudi Arabia ..........................0.07
50 Kuwait ...................................0.06
50 Venezuela ..............................0.06
52 Nigeria...................................0.05
53 Jordan ...................................0.04
53 Morocco................................0.04
55 Bahrain ..................................0.04
56 Panama .................................0.04
57 Bangladesh ...........................0.02
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
5.07
Life insurance density
This variable is the direct life insurance premiums from domestic
sources to GDP | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 Ireland .................................15.56
2 South Africa.........................10.02
3 United Kingdom ....................9.97
4 Hong Kong SAR ....................9.62
5 Japan .....................................7.87
6 Finland ...................................7.56
7 France ....................................7.25
8 Korea, Rep. ...........................6.90
9 Denmark ...............................6.80
10 Sweden .................................6.14
11 Italy .......................................5.44
12 Belgium .................................5.40
13 Switzerland............................5.33
14 Singapore ..............................5.11
15 India ......................................4.62
16 Netherlands...........................4.25
17 United States ........................3.45
18 Germany ...............................3.33
19 Canada ..................................3.27
20 Australia ................................3.26
21 Malaysia ................................2.97
22 Austria ...................................2.71
23 Spain .....................................2.68
24 Norway..................................2.61
25 Chile ......................................2.55
26 Israel .....................................2.53
27 Thailand .................................2.35
28 China .....................................2.22
29 Poland ....................................1.93
30 Czech Republic ......................1.59
31 Brazil ......................................1.57
32 Hungary .................................1.57
33 Slovak Republic .....................1.48
34 Philippines.............................0.97
35 Panama .................................0.97
36 Indonesia...............................0.94
37 Morocco................................0.91
38 Mexico ..................................0.88
39 Colombia ...............................0.74
40 Vietnam .................................0.73
41 Bahrain ..................................0.68
42 Bangladesh ...........................0.67
43 Peru .......................................0.54
44 Argentina...............................0.46
45 Egypt.....................................0.37
46 Romania ................................0.33
47 Pakistan.................................0.33
48 United Arab Emirates............0.32
49 Jordan ...................................0.21
50 Turkey ....................................0.19
51 Venezuela ..............................0.15
52 Ukraine..................................0.09
53 Nigeria...................................0.08
54 Kuwait ...................................0.08
55 Saudi Arabia ..........................0.07
56 Kazakhstan ............................0.06
57 Russian Federation................0.05
SOURCES: Swiss Re, World Insurance in 2009: Premiums Dipped, but
Industry Capital Improved; GDP data from the IMF, World Economic
Outlook Database (April 2010)
5.08
3: Data Tables | Non-banking financial services
Non–life insurance density
This variable is the direct non-life insurance premiums from domestic
sources to GDP | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 Netherlands...........................9.36
2 United States ........................4.54
3 Switzerland............................4.47
4 United Kingdom ....................4.19
5 Korea, Rep.............................4.15
6 Canada ..................................4.13
7 Ireland ...................................4.02
8 Venezuela..............................4.00
9 Germany ...............................3.78
10 Denmark ...............................3.48
11 France ...................................3.33
12 Austria ...................................3.30
13 Belgium .................................3.20
14 Russian Federation................3.17
15 Spain .....................................2.98
16 Singapore ..............................2.93
17 South Africa ..........................2.86
18 Australia ................................2.79
19 Italy .......................................2.55
20 Israel .....................................2.49
21 Panama .................................2.46
22 Czech Republic ......................2.17
347
23 Ukraine ..................................2.17
24 Argentina ...............................2.11
25 Japan .....................................2.11
26 Norway..................................2.10
27 Jordan....................................2.01
28 Finland ...................................1.95
29 Sweden .................................1.94
30 Morocco ................................1.94
31 United Arab Emirates ............1.91
32 Poland ....................................1.86
33 Bahrain...................................1.77
34 Chile ......................................1.72
35 Slovak Republic .....................1.69
36 Malaysia.................................1.65
37 Thailand .................................1.61
38 Colombia ...............................1.58
39 Brazil ......................................1.52
40 Hungary .................................1.51
41 Romania.................................1.46
42 Hong Kong SAR.....................1.39
43 Mexico ...................................1.10
44 China......................................1.10
45 Turkey ....................................1.09
46 Saudi Arabia ..........................0.98
47 Vietnam .................................0.83
48 Peru .......................................0.82
49 Kazakhstan ............................0.65
50 India ......................................0.64
51 Philippines.............................0.52
52 Egypt.....................................0.46
53 Nigeria...................................0.45
54 Indonesia...............................0.41
55 Pakistan.................................0.39
56 Kuwait ...................................0.33
57 Bangladesh ...........................0.22
SOURCES: Swiss Re, World Insurance in 2009: Premiums Dipped, but
Industry Capital Improved; GDP data from the IMF, World Economic
Outlook Database (April 2010)
 3: Data Tables | Non-banking financial services
5.09
Real growth of direct insurance premiums
This is the annual real rate of growth (%) of direct premiums (life and
non-life) based on local currency prices | 2008
RANK COUNTRY/ECONOMY HARD DATA
1 China .....................................0.31
2 Poland ...................................0.30
3 Saudi Arabia ..........................0.22
4 Panama..................................0.17
5 Colombia ...............................0.15
6 Romania ................................0.15
7 United Arab Emirates ............0.14
8 Argentina...............................0.12
9 Egypt .....................................0.11
10 Peru .......................................0.10
11 Chile ......................................0.10
12 Australia ................................0.09
13 Brazil .....................................0.08
14 Morocco................................0.08
15 Russian Federation................0.07
16 Japan.....................................0.07
17 Slovak Republic .....................0.05
18 Mexico ..................................0.05
19 South Africa ..........................0.04
20 Spain .....................................0.04
21 Israel .....................................0.03
22 Singapore ..............................0.02
348
23 Malaysia ................................0.02
24 Sweden .................................0.01
25 Canada ..................................0.01
26 Finland ...................................0.01
27 Thailand .................................0.01
28 Denmark................................0.01
29 India ......................................0.00
30 Netherlands...........................0.00
31 Austria ..................................-0.01
32 Switzerland ..........................–0.01
33 Vietnam ...............................–0.01
34 Korea, Rep. ..........................–0.01
35 Germany ..............................–0.01
36 Czech Republic ....................–0.01
37 Norway................................–0.02
38 Belgium ...............................–0.03
39 Turkey ..................................–0.03
40 United States ......................–0.03
41 Philippines ...........................–0.04
42 Jordan .................................–0.05
43 Indonesia.............................–0.05
44 Hong Kong SAR ..................–0.06
45 France..................................–0.09
46 Hungary ...............................–0.10
47 Italy ......................................–0.11
48 United Kingdom ..................–0.13
49 Kazakhstan ..........................–0.23
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Ireland .....................................n/a
n/a Kuwait .....................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Ukraine ....................................n/a
n/a Venezuela ................................n/a
SOURCE: Swiss Re, World Insurance in 2008: Emerging Markets Leading
the Way
5.10
Life insurance coverage
This is the direct domestic premiums for life insurance to per capita
GDP | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 India ....................................55.41
2 China ...................................29.68
3 United States ......................10.62
4 Japan ...................................10.05
5 United Kingdom ....................6.16
6 South Africa ..........................4.94
7 France ...................................4.54
8 Korea, Rep. ...........................3.36
9 Italy .......................................3.25
10 Brazil......................................3.01
11 Germany ...............................2.73
12 Indonesia...............................2.17
13 Thailand .................................1.58
14 Spain......................................1.23
15 Bangladesh ............................1.11
16 Canada ...................................1.10
17 Mexico ..................................0.95
18 Philippines.............................0.90
19 Malaysia ................................0.82
20 Poland ...................................0.73
21 Australia ................................0.71
22 Netherlands...........................0.70
23 Ireland ...................................0.69
24 Hong Kong SAR ....................0.68
25 Vietnam .................................0.63
26 Belgium .................................0.58
27 Sweden .................................0.57
28 Pakistan.................................0.53
29 Chile ......................................0.43
30 Finland...................................0.40
31 Switzerland............................0.39
32 Denmark ...............................0.37
33 Colombia ...............................0.33
34 Morocco................................0.29
35 Egypt.....................................0.29
36 Singapore ..............................0.24
37 Austria ...................................0.22
38 Argentina...............................0.19
39 Israel......................................0.18
40 Czech Republic ......................0.17
41 Hungary.................................0.16
42 Peru .......................................0.16
43 Turkey ....................................0.13
44 Nigeria ...................................0.13
45 Norway..................................0.13
46 Slovak Republic .....................0.08
47 Russian Federation................0.07
48 Romania ................................0.07
49 Venezuela ..............................0.04
50 Ukraine..................................0.04
51 Panama .................................0.03
52 Saudi Arabia ..........................0.02
53 United Arab Emirates............0.02
54 Jordan....................................0.01
55 Kazakhstan ............................0.01
56 Bahrain ..................................0.01
57 Kuwait ...................................0.00
SOURCES: Swiss Re, World Insurance in 2009: Premiums Dipped, but
Industry Capital Improved; GDP data from the IMF, World Economic
Outlook Database (April 2010)
5.11
Non–life insurance coverage
This is the direct domestic premiums for non-life insurance to per
capita GDP | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 China ...................................14.65
2 United States ......................13.96
3 India .......................................7.73
4 Russian Federation................4.48
5 Germany................................3.10
6 Brazil .....................................2.92
7 Japan.....................................2.69
8 United Kingdom ....................2.59
9 France ...................................2.08
10 Korea, Rep. ...........................2.02
11 Netherlands ...........................1.54
12 Italy........................................1.53
13 South Africa ...........................1.41
14 Canada...................................1.39
15 Spain......................................1.36
16 Mexico ...................................1.19
17 Venezuela...............................1.15
18 Thailand .................................1.08
19 Ukraine..................................0.99
20 Indonesia...............................0.95
21 Argentina...............................0.85
22 Turkey....................................0.77
23 Vietnam .................................0.73
24 Colombia ...............................0.71
25 Poland ...................................0.71
26 Nigeria...................................0.69
27 Pakistan.................................0.64
28 Morocco................................0.61
29 Australia ................................0.61
30 Philippines.............................0.48
31 Malaysia ................................0.46
32 Bangladesh ...........................0.36
33 Egypt.....................................0.35
34 Belgium .................................0.35
35 Switzerland............................0.33
36 Romania ................................0.31
37 Chile ......................................0.29
38 Austria ...................................0.27
39 Saudi Arabia ..........................0.25
40 Peru .......................................0.24
41 Czech Republic......................0.23
42 Denmark................................0.19
43 Israel......................................0.18
44 Sweden .................................0.18
45 Ireland ...................................0.18
46 Hungary.................................0.15
47 Singapore ..............................0.14
48 Jordan ...................................0.12
49 Finland ...................................0.10
50 Norway..................................0.10
51 Kazakhstan ............................0.10
52 Hong Kong SAR ....................0.10
53 United Arab Emirates............0.09
54 Slovak Republic .....................0.09
55 Panama .................................0.09
56 Bahrain ..................................0.02
57 Kuwait ...................................0.01
SOURCES: Swiss Re, World Insurance in 2009: Premiums Dipped, but
Industry Capital Improved; GDP data from the IMF, World Economic
Outlook Database (April 2010)
5.12
3: Data Tables | Non-banking financial services
Relative value-added of insurance to GDP
This is the value added by insurance and pension services to the
economy after costs are subtracted, as a percentage of GDP | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 Bahrain ..................................5.94
2 Hong Kong SAR ....................4.53
3 Singapore ..............................3.46
4 Switzerland............................3.37
5 United States ........................3.00
6 Ireland ...................................2.88
7 Israel......................................2.76
8 Malaysia ................................2.62
9 Egypt.....................................2.24
10 Ukraine..................................2.22
11 South Africa...........................2.14
12 Australia ................................2.12
13 Korea, Rep. ............................1.90
14 Brazil ......................................1.81
15 Japan .....................................1.76
16 Morocco.................................1.74
17 Jordan....................................1.66
18 Netherlands ...........................1.59
19 Chile ......................................1.55
20 United Kingdom.....................1.52
21 Russian Federation ................1.45
22 Argentina ...............................1.26
349
23 United Arab Emirates ............1.26
24 Denmark ................................1.14
25 Canada ...................................1.14
26 Indonesia ...............................1.14
27 Turkey ....................................1.14
28 Colombia................................1.14
29 Poland ....................................1.07
30 Sweden .................................1.02
31 Austria ...................................0.98
32 India ......................................0.94
33 Czech Republic......................0.94
34 France ...................................0.94
35 Norway..................................0.93
36 Peru .......................................0.93
37 Belgium .................................0.88
38 Kuwait ...................................0.85
39 Panama .................................0.78
40 Philippines.............................0.77
41 Slovak Republic .....................0.77
42 Italy .......................................0.64
43 Spain .....................................0.64
44 Finland...................................0.63
45 Pakistan.................................0.62
46 Germany ...............................0.62
47 Vietnam .................................0.59
48 China .....................................0.52
49 Hungary ................................0.51
50 Thailand .................................0.50
51 Saudi Arabia ..........................0.49
52 Bangladesh ...........................0.48
53 Nigeria...................................0.39
54 Mexico ..................................0.34
55 Romania ................................0.18
56 Venezuela ..............................0.18
n/a Kazakhstan ..............................n/a
SOURCE: Global Insight, World Industry Services, August 2010
 3: Data Tables | Non-banking financial services
5.13
Securitization to GDP
This is the three-year average of the sum of asset-backed securities
(ABS), mortgage-backed securities (MBS), high-yield bonds, and
highly leveraged loans deal value as a percentage of GDP | 2007–09
RANK COUNTRY/ECONOMY HARD DATA
1 United States ......................10.75
2 United Kingdom ....................5.82
3 Netherlands...........................4.96
4 Ireland ...................................4.47
5 Jordan ...................................3.66
6 Spain .....................................3.36
7 Singapore ..............................3.22
8 Kazakhstan ............................3.20
9 Korea, Rep. ...........................3.04
10 Denmark ...............................2.89
11 Canada ..................................2.85
12 Australia ................................2.84
13 Finland...................................2.66
14 Russian Federation................2.61
15 Philippines.............................2.31
16 Ukraine..................................2.27
17 Belgium .................................2.26
18 Malaysia ................................2.01
19 Egypt .....................................1.84
20 United Arab Emirates ............1.79
21 Turkey ....................................1.79
22 Hong Kong SAR.....................1.67
350
23 France ....................................1.67
24 Germany ................................1.66
25 Sweden .................................1.63
26 Kuwait....................................1.38
27 South Africa ...........................1.35
28 Mexico...................................1.26
29 Argentina ...............................1.20
30 Vietnam .................................1.18
31 Indonesia ...............................1.16
32 Venezuela...............................1.15
33 Colombia................................1.13
34 Italy ........................................1.11
35 Hungary .................................1.06
36 Switzerland ............................1.03
37 Norway ..................................1.01
38 Peru .......................................0.97
39 Japan.....................................0.82
40 Chile ......................................0.81
41 Brazil .....................................0.75
42 Morocco................................0.72
43 Pakistan.................................0.69
44 India ......................................0.58
45 Austria ...................................0.48
46 Slovak Republic .....................0.47
47 Romania ................................0.40
48 Panama .................................0.39
49 Nigeria...................................0.38
50 Saudi Arabia ..........................0.29
51 Poland ...................................0.24
52 Czech Republic......................0.24
53 Thailand .................................0.15
54 Israel......................................0.14
55 China .....................................0.11
56 Bahrain ..................................0.08
57 Bangladesh............................0.01
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
5.14
Share of total number of securitization deals
This is the three-year average of the sum of asset-backed securities
(ABS), mortgage-backed securities (MBS), high-yield bonds, and
highly leveraged loans deals as a percentage of total deals |
2007–09
RANK COUNTRY/ECONOMY HARD DATA
1 United States.......................61.68
2 Korea, Rep.............................5.01
3 Russian Federation................3.62
4 Argentina...............................3.09
5 United Kingdom ....................2.66
6 Canada ..................................2.45
7 Japan .....................................2.01
8 France ....................................1.94
9 Germany ................................1.39
10 India .......................................1.37
11 Mexico...................................1.26
11 Spain......................................1.26
13 Brazil ......................................1.22
14 Ukraine ..................................1.12
15 Australia.................................1.00
16 Italy .......................................0.93
17 Netherlands ...........................0.76
18 Indonesia...............................0.73
19 Peru .......................................0.49
20 Philippines.............................0.43
21 Kazakhstan ............................0.42
22 Ireland ...................................0.38
23 China .....................................0.37
24 Turkey....................................0.37
25 Malaysia ................................0.35
26 Colombia ...............................0.32
27 Singapore ..............................0.32
28 Chile ......................................0.26
29 Belgium .................................0.24
30 United Arab Emirates............0.21
31 Pakistan.................................0.21
32 Hong Kong SAR ....................0.20
33 Vietnam .................................0.19
34 Norway..................................0.18
35 Sweden .................................0.18
35 Switzerland............................0.18
37 South Africa...........................0.14
38 Finland...................................0.12
39 Denmark................................0.12
40 Hungary ................................0.09
41 Poland ...................................0.08
42 Egypt.....................................0.07
42 Thailand .................................0.07
44 Austria ...................................0.06
44 Kuwait ...................................0.06
44 Nigeria...................................0.06
44 Romania ................................0.06
48 Saudi Arabia ..........................0.04
48 Slovak Republic .....................0.04
50 Czech Republic......................0.04
51 Venezuela ..............................0.03
52 Israel .....................................0.02
52 Jordan ...................................0.02
52 Morocco................................0.02
55 Panama..................................0.01
56 Bahrain ..................................0.01
56 Bangladesh............................0.01
SOURCE: Dealogic Analytics, data retrieved July 2010
Data Tables

Section VI
Financial markets
 3: Data Tables | Financial markets
6.01
Spot foreign exchange turnover
This is the percentage share of the world total of spot foreign
exchange turnover | April 2007
RANK COUNTRY/ECONOMY HARD DATA
1 United Kingdom ..................26.29
2 United States ......................24.40
3 Switzerland............................8.50
4 Japan .....................................7.91
5 Singapore ..............................6.99
6 Australia ................................3.47
7 Hong Kong SAR ....................2.97
8 Russian Federation................2.66
9 France ....................................1.96
10 Germany ................................1.92
11 Korea, Rep. ............................1.36
12 Denmark ................................1.18
13 Belgium..................................1.15
14 India .......................................1.12
15 Canada...................................1.07
16 Italy .......................................0.88
17 China .....................................0.65
18 Sweden .................................0.61
19 Spain .....................................0.48
20 Austria ...................................0.43
21 Brazil .....................................0.40
22 Mexico ..................................0.35
352
23 Ireland ...................................0.30
24 Israel .....................................0.28
25 Norway..................................0.27
26 South Africa ..........................0.27
27 Netherlands...........................0.24
28 Saudi Arabia ..........................0.21
29 Poland....................................0.19
30 Hungary.................................0.17
31 Chile ......................................0.16
32 Indonesia...............................0.13
33 Malaysia ................................0.13
34 Bahrain ..................................0.12
35 Czech Republic ......................0.11
36 Thailand .................................0.11
37 Colombia ...............................0.10
38 Argentina...............................0.09
39 Philippines.............................0.08
40 Romania ................................0.08
41 Turkey....................................0.06
42 Finland...................................0.05
43 Peru .......................................0.05
44 Slovak Republic .....................0.02
n/a Bangladesh..............................n/a
n/a Egypt .......................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
6.02
Outright forward foreign exchange turnover
This is the percentage share of the world total of outright forward
foreign exchange turnover | April 2007
RANK COUNTRY/ECONOMY HARD DATA
1 United Kingdom ..................29.21
2 United States ......................26.72
3 Japan.....................................6.03
4 Singapore ..............................5.93
5 Germany ...............................5.32
6 Switzerland............................3.96
7 Hong Kong SAR ....................3.46
8 Australia ................................3.41
9 Denmark ...............................2.35
10 France ....................................1.76
11 Belgium .................................1.71
12 India .......................................1.48
13 Netherlands ...........................1.34
14 Korea, Rep. ............................1.21
15 Canada ...................................1.01
16 Italy .......................................0.60
17 Norway..................................0.57
18 Spain .....................................0.48
19 Austria ...................................0.45
20 Sweden .................................0.37
21 Chile ......................................0.35
22 Russian Federation................0.26
23 South Africa ..........................0.22
24 Czech Republic......................0.21
25 Ireland ...................................0.21
26 Bahrain ..................................0.17
27 Thailand .................................0.16
28 Turkey ....................................0.15
29 Poland....................................0.12
30 Indonesia...............................0.12
31 Colombia ...............................0.11
32 Mexico...................................0.10
33 Finland...................................0.09
34 Malaysia ................................0.08
35 Brazil .....................................0.08
36 Peru .......................................0.05
37 Philippines.............................0.05
38 Hungary ................................0.04
39 Saudi Arabia ..........................0.03
40 Romania ................................0.02
41 China .....................................0.01
42 Argentina...............................0.00
43 Slovak Republic.....................0.00
n/a Bangladesh..............................n/a
n/a Egypt .......................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
6.03
Foreign exchange swap turnover
This is the percentage share of the world total of foreign exchange
swap turnover | April 2007
RANK COUNTRY/ECONOMY HARD DATA
1 United Kingdom ..................40.82
2 United States ......................10.83
3 Hong Kong SAR ....................5.54
4 Switzerland............................5.28
5 Singapore ..............................5.27
6 Japan.....................................5.08
7 Australia ................................5.02
8 France ...................................3.96
9 Denmark ...............................2.77
10 Germany ...............................2.34
11 Canada...................................1.90
12 Sweden .................................1.49
13 Belgium..................................1.19
14 Norway ..................................1.18
15 Italy .......................................0.99
16 Russian Federation................0.68
17 Netherlands...........................0.68
18 India ......................................0.61
19 Korea, Rep. ...........................0.49
20 Austria ...................................0.47
21 Mexico ..................................0.46
22 South Africa ..........................0.43
23 Spain .....................................0.36
24 Finland...................................0.32
25 Poland ...................................0.27
26 Ireland ...................................0.26
27 Israel .....................................0.20
28 Hungary ................................0.20
29 Thailand .................................0.19
30 Slovak Republic .....................0.14
31 Czech Republic......................0.12
32 Turkey....................................0.09
33 Romania ................................0.06
34 Malaysia ................................0.06
35 Saudi Arabia ..........................0.06
36 Philippines.............................0.05
37 China .....................................0.04
38 Bahrain ..................................0.03
39 Indonesia...............................0.03
40 Chile ......................................0.02
41 Colombia ...............................0.00
42 Brazil .....................................0.00
n/a Argentina.................................n/a
n/a Bangladesh..............................n/a
n/a Egypt .......................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Peru .........................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
6.04
3: Data Tables | Financial markets
Interest rate derivatives turnover: Forward rate
agreements
This is the percentage share of world total of over-the-counter single
currency forward interest rate agreements turnover | April 2007
RANK COUNTRY/ECONOMY HARD DATA
1 United Kingdom...................45.11
2 United States ......................26.90
3 Germany ................................7.27
4 France ...................................5.58
5 Sweden .................................2.58
6 Switzerland ............................1.83
7 Canada...................................1.81
8 Norway ..................................1.56
9 Denmark ................................1.09
10 Australia.................................1.05
11 Japan .....................................1.00
12 Italy........................................0.74
13 South Africa ..........................0.68
14 Belgium .................................0.49
15 Singapore ..............................0.47
16 Poland ...................................0.42
17 Netherlands...........................0.28
18 Hong Kong SAR ....................0.21
19 Hungary.................................0.17
20 Austria ...................................0.16
21 Spain .....................................0.16
22 Czech Republic......................0.14
353
23 Korea, Rep.............................0.13
24 Mexico ..................................0.09
25 Finland...................................0.05
26 Ireland ...................................0.03
27 Thailand.................................0.00
28 Malaysia ................................0.00
29 Turkey....................................0.00
30 Colombia ...............................0.00
31 Indonesia...............................0.00
31 Philippines.............................0.00
31 Saudi Arabia ..........................0.00
34 Chile ......................................0.00
n/a Argentina.................................n/a
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Brazil........................................n/a
n/a China .......................................n/a
n/a Egypt .......................................n/a
n/a India.........................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Peru .........................................n/a
n/a Romania ..................................n/a
n/a Russian Federation..................n/a
n/a Slovak Republic .......................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
 3: Data Tables | Financial markets
6.05
Interest rate derivatives turnover: Swaps
This is the percentage share of the world total of over-the-counter
single currency interest rate swaps turnover | April 2007
RANK COUNTRY/ECONOMY HARD DATA
1 United Kingdom ..................45.84
2 United States ......................20.52
3 France ...................................8.97
4 Germany ...............................4.09
5 Switzerland............................3.51
6 Singapore ..............................3.50
7 Japan .....................................3.17
8 Netherlands ...........................1.64
9 Italy........................................1.59
10 Australia .................................1.15
11 Hong Kong SAR.....................1.03
12 Belgium .................................1.02
13 Spain......................................1.00
14 Canada ..................................0.70
15 Ireland ...................................0.45
16 Denmark ...............................0.31
17 Korea, Rep. ...........................0.29
18 Austria ...................................0.26
19 India ......................................0.22
20 Mexico ..................................0.15
21 Sweden .................................0.13
22 Finland...................................0.13
354
23 South Africa ..........................0.09
24 Poland ...................................0.08
25 Norway..................................0.08
26 Thailand .................................0.02
27 Hungary ................................0.02
28 Czech Republic ......................0.01
29 Bahrain ..................................0.01
30 Brazil......................................0.01
31 Malaysia ................................0.01
32 Saudi Arabia ..........................0.01
33 Indonesia...............................0.00
34 Turkey....................................0.00
35 Chile ......................................0.00
36 Philippines.............................0.00
36 Romania ................................0.00
38 Colombia ...............................0.00
n/a Argentina.................................n/a
n/a Bangladesh..............................n/a
n/a China .......................................n/a
n/a Egypt .......................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Peru .........................................n/a
n/a Russian Federation..................n/a
n/a Slovak Republic .......................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
6.06
Interest rate derivatives turnover: Options
This is the percentage share of the world total of over-the-counter
interest rate options turnover | April 2007
RANK COUNTRY/ECONOMY HARD DATA
1 United States ......................42.38
2 United Kingdom ..................34.08
3 Japan.....................................8.79
4 France ...................................6.03
5 Belgium .................................1.52
6 Canada...................................1.33
7 Italy........................................1.00
8 Germany ...............................0.73
9 Singapore ..............................0.57
10 Sweden .................................0.55
11 Denmark ...............................0.53
12 Australia ................................0.49
13 Finland...................................0.33
14 South Africa ..........................0.31
15 Spain .....................................0.25
16 Netherlands...........................0.22
17 Hong Kong SAR ....................0.21
18 Korea, Rep.............................0.16
19 Thailand .................................0.15
20 Austria ...................................0.09
21 Mexico ..................................0.09
22 Saudi Arabia ..........................0.06
23 Ireland ...................................0.06
24 Turkey....................................0.03
25 Norway..................................0.03
26 Switzerland............................0.02
27 Poland ...................................0.00
28 Czech Republic......................0.00
29 Indonesia...............................0.00
29 Malaysia ................................0.00
31 Brazil .....................................0.00
n/a Argentina.................................n/a
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Chile ........................................n/a
n/a China .......................................n/a
n/a Colombia .................................n/a
n/a Egypt .......................................n/a
n/a Hungary...................................n/a
n/a India.........................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Peru .........................................n/a
n/a Philippines ...............................n/a
n/a Romania ..................................n/a
n/a Russian Federation..................n/a
n/a Slovak Republic .......................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
6.07
Foreign exchange derivatives turnover:
Currency swaps
This is the percentage share of the world total of over-the-counter
foreign exchange currency swaps turnover | April 2007
RANK COUNTRY/ECONOMY HARD DATA
1 United Kingdom ..................46.65
2 United States ......................16.98
3 Australia ................................5.55
4 Canada ..................................4.20
5 France ...................................3.64
6 Korea, Rep.............................3.15
7 Singapore ..............................3.05
8 Japan.....................................2.71
9 Denmark ................................1.92
10 Hong Kong SAR.....................1.64
11 Turkey ....................................1.46
12 India .......................................1.25
13 Netherlands ...........................1.03
14 Ireland....................................1.03
15 Belgium .................................0.94
16 Brazil .....................................0.70
17 Saudi Arabia ..........................0.69
18 Austria ...................................0.49
19 Germany ...............................0.48
20 Spain .....................................0.34
21 Italy .......................................0.33
22 Indonesia...............................0.28
23 Thailand .................................0.28
24 Switzerland............................0.20
25 Poland....................................0.18
26 Norway..................................0.14
27 Bahrain ..................................0.13
28 Finland...................................0.12
29 South Africa...........................0.10
30 Malaysia ................................0.10
31 Chile ......................................0.07
32 Sweden .................................0.05
33 Philippines.............................0.04
34 Mexico ..................................0.03
35 Colombia ...............................0.02
35 Czech Republic......................0.02
37 Hungary ................................0.00
n/a Argentina.................................n/a
n/a Bangladesh..............................n/a
n/a China .......................................n/a
n/a Egypt .......................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Peru .........................................n/a
n/a Romania ..................................n/a
n/a Russian Federation..................n/a
n/a Slovak Republic .......................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
6.08
3: Data Tables | Financial markets
Foreign exchange derivatives turnover: Options
This is the percentage share of the world total of over-the-counter
foreign exchange options turnover | April 2007
RANK COUNTRY/ECONOMY HARD DATA
1 United Kingdom ..................42.39
2 United States ......................29.95
3 Switzerland............................4.73
4 Japan.....................................4.29
5 Singapore ..............................4.01
6 Hong Kong SAR ....................2.28
7 France ...................................2.21
8 Australia.................................1.85
9 India .......................................1.52
10 Canada...................................1.04
11 Germany ...............................0.99
12 Italy........................................0.74
13 Sweden .................................0.69
14 Belgium .................................0.60
15 Denmark ...............................0.55
16 Austria ...................................0.31
17 Spain .....................................0.29
18 Netherlands...........................0.26
19 Korea, Rep. ...........................0.25
20 Ireland ...................................0.18
21 Israel......................................0.16
22 Poland....................................0.14
355
23 Turkey....................................0.07
24 Bahrain ..................................0.06
25 Hungary ................................0.06
26 Mexico ..................................0.05
27 Finland...................................0.05
28 Indonesia...............................0.05
29 Norway..................................0.04
30 Saudi Arabia ..........................0.04
31 South Africa ..........................0.03
32 Czech Republic......................0.03
33 Slovak Republic .....................0.02
34 Brazil .....................................0.02
35 Thailand .................................0.01
36 Malaysia ................................0.01
37 Russian Federation................0.01
38 Romania ................................0.00
39 Colombia ...............................0.00
40 Philippines.............................0.00
41 Chile ......................................0.00
n/a Argentina.................................n/a
n/a Bangladesh..............................n/a
n/a China .......................................n/a
n/a Egypt .......................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Peru .........................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
 3: Data Tables | Financial markets
6.09
Stock market turnover ratio
This is the ratio of the value of total shares traded to average real
market capitalization | 2008 or most recent year available
RANK COUNTRY/ECONOMY HARD DATA
1 Italy ...................................348.21
2 United States.....................271.78
3 Netherlands.......................252.24
4 Sweden .............................212.36
5 Korea, Rep.........................194.35
6 Switzerland ........................187.73
7 Spain .................................186.20
8 Singapore ..........................184.59
9 Germany............................168.95
10 Finland ...............................162.15
11 Japan.................................159.69
12 France................................146.61
13 Australia .............................141.23
14 Norway..............................139.00
15 Hungary.............................136.66
16 Saudi Arabia1 ......................131.98
17 Belgium .............................108.82
18 Denmark .............................99.05
19 Kuwait .................................95.68
20 Indonesia.............................82.48
21 Turkey ..................................79.19
22 Hong Kong SAR1 .................78.87
23 Pakistan...............................78.37
356 24 Malaysia ..............................78.35
25 Canada.................................74.55
26 Austria .................................69.52
27 Vietnam1 ..............................64.39
28 South Africa ........................59.62
29 United Arab Emirates..........53.81
30 Russian Federation ..............51.80
31 Philippines...........................50.89
32 Brazil ...................................50.33
33 Czech Republic....................48.67
34 India ....................................45.81
35 Poland .................................45.40
36 Morocco ..............................45.14
37 Israel ...................................44.47
38 Thailand ...............................42.27
39 Mexico .................................37.52
40 Egypt...................................28.98
41 Chile.....................................27.22
42 Romania ..............................24.57
43 Jordan .................................23.98
44 Nigeria1 ................................19.43
45 Argentina.............................16.97
46 Peru .......................................6.53
47 Colombia ...............................5.51
48 Bahrain ..................................4.98
49 Panama..................................1.42
50 Ukraine ..................................1.18
51 Slovak Republic1 ....................0.43
n/a Bangladesh..............................n/a
n/a China .......................................n/a
n/a Ireland .....................................n/a
n/a Kazakhstan ..............................n/a
n/a United Kingdom ......................n/a
n/a Venezuela ................................n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
1 1
2007
6.10
Stock market capitalization to GDP
This indicator is the value of listed shares as a percentage of GDP |
2008 or most recent year available
RANK COUNTRY/ECONOMY HARD DATA
1 Hong Kong SAR ................603.48
2 Switzerland........................320.42
3 South Africa ......................308.43
4 Jordan ...............................208.85
5 Malaysia ............................180.29
6 Canada ...............................174.42
7 India...................................173.16
8 Singapore ..........................172.54
9 Australia ............................162.57
10 Israel ..................................157.82
11 Finland...............................148.77
12 United States .....................147.76
13 Sweden..............................141.03
14 United Kingdom ................136.61
15 Chile ..................................132.49
16 Netherlands.......................129.86
17 Spain .................................128.52
18 Russian Federation............124.58
19 Morocco ............................123.98
20 Korea, Rep. ........................118.42
21 Brazil ..................................113.36
22 France ................................112.32
23 Peru ...................................109.78
24 Japan .................................102.30
25 Egypt..................................101.72
26 Norway ..............................100.14
27 Ukraine.................................97.72
28 Denmark ..............................91.66
29 Belgium ...............................88.18
30 Saudi Arabia ........................85.56
31 Philippines ...........................76.26
32 Thailand ...............................73.27
33 Germany .............................64.98
34 Austria .................................63.53
35 Ireland .................................58.23
36 Colombia .............................56.12
37 Indonesia.............................55.34
38 Kazakhstan ..........................52.23
39 Mexico.................................51.46
40 Poland ..................................51.10
41 Italy .....................................50.59
42 Pakistan ...............................45.10
43 Czech Republic....................44.19
44 Turkey...................................37.88
45 Hungary ...............................31.89
46 Argentina.............................30.45
47 Panama ...............................28.86
48 Romania ..............................25.12
49 Vietnam1 ..............................20.12
50 Bangladesh ..........................11.09
51 Slovak Republic......................7.79
n/a Bahrain ....................................n/a
n/a China .......................................n/a
n/a Kuwait .....................................n/a
n/a Nigeria .....................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
2007
6.11
Stock market value traded to GDP
This is the total value of shares traded on stock market exchanges as
a percentage of GDP | 2008
RANK COUNTRY/ECONOMY HARD DATA
1 Switzerland ........................541.19
2 United States ....................383.51
3 Netherlands.......................344.42
4 Finland...............................299.38
5 Spain .................................276.39
6 Korea, Rep.........................276.03
7 Sweden .............................270.88
8 Singapore ..........................238.14
9 Australia ............................236.06
10 South Africa .......................197.40
11 Saudi Arabia.......................178.12
12 Italy ....................................167.02
13 France................................159.01
14 Japan.................................153.75
15 Canada ..............................153.33
16 Norway..............................146.78
17 India ...................................127.37
18 Germany............................122.73
19 Denmark .............................98.78
20 Jordan .................................82.97
21 Ireland .................................82.91
22 Israel ...................................79.53
23 Belgium ...............................78.18
24 Russian Federation..............66.37
25 Turkey ..................................49.74
26 Pakistan...............................46.34
27 Hungary ..............................44.21
28 Austria .................................42.65
29 Thailand ...............................39.70
30 Egypt...................................39.02
31 Chile ....................................36.97
32 Morocco..............................35.86
33 Czech Republic ....................27.02
34 Poland .................................25.43
35 Vietnam ................................17.67
36 Mexico .................................17.25
37 Kazakhstan ..........................14.72
38 Peru .......................................9.96
39 Romania.................................7.04
40 Argentina...............................4.75
41 Colombia ...............................4.38
42 Ukraine ..................................1.87
43 Panama .................................0.41
44 Slovak Republic .....................0.04
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Brazil........................................n/a
n/a China .......................................n/a
n/a Hong Kong SAR ......................n/a
n/a Indonesia.................................n/a
n/a Kuwait .....................................n/a
n/a Malaysia ..................................n/a
n/a Nigeria .....................................n/a
n/a Philippines ...............................n/a
n/a United Arab Emirates ..............n/a
n/a United Kingdom ......................n/a
n/a Venezuela ................................n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
6.12
3: Data Tables | Financial markets
Number of listed companies per 10,000 people
This is the number of publicly listed companies per 10,000 people |
2008
RANK COUNTRY/ECONOMY HARD DATA
1 Hong Kong SAR.....................1.30
2 Canada ...................................1.19
3 Singapore...............................1.01
4 Australia ................................0.98
5 Israel .....................................0.96
6 Romania ................................0.81
7 Spain .....................................0.80
8 Kuwait ...................................0.73
9 Bahrain ..................................0.50
10 Jordan ...................................0.45
11 Malaysia ................................0.39
12 Korea, Rep. ...........................0.38
13 United Kingdom ....................0.37
14 Japan.....................................0.35
15 Switzerland............................0.34
16 Slovak Republic .....................0.25
17 Sweden .................................0.25
18 United Arab Emirates............0.22
19 United States ........................0.17
20 Chile ......................................0.14
21 France....................................0.11
22 Poland....................................0.11
357
23 South Africa ..........................0.09
24 Germany ...............................0.08
25 Kazakhstan ............................0.08
26 Thailand .................................0.07
27 Peru .......................................0.07
28 Ukraine..................................0.07
29 Panama .................................0.06
30 Saudi Arabia ..........................0.06
31 Italy .......................................0.05
32 India ......................................0.04
33 Turkey....................................0.04
34 Hungary ................................0.04
35 Egypt.....................................0.04
36 Pakistan.................................0.04
37 Czech Republic......................0.03
38 Argentina...............................0.03
39 Philippines.............................0.03
40 Morocco................................0.03
41 Brazil .....................................0.03
42 Russian Federation................0.02
43 Venezuela ..............................0.02
44 Indonesia...............................0.02
45 Bangladesh ...........................0.02
46 Colombia ...............................0.02
47 Vietnam .................................0.02
48 Nigeria ...................................0.01
49 China .....................................0.01
50 Mexico...................................0.01
n/a Austria .....................................n/a
n/a Belgium ...................................n/a
n/a Denmark..................................n/a
n/a Finland.....................................n/a
n/a Ireland .....................................n/a
n/a Netherlands.............................n/a
n/a Norway....................................n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A
New Database on Financial Development and Structure.” World Bank
Economic Review 14: 597–605. Updated May 2009
 3: Data Tables | Financial markets
6.13
Private domestic bond market capitalization to
GDP
This variable is the domestic debt securities issued by financial
institutions and corporations as a share of GDP | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 Denmark............................175.69
2 United States.....................114.60
3 Spain ...................................88.21
4 Italy .....................................75.69
5 Netherlands .........................74.99
6 Austria .................................60.66
7 Sweden ...............................60.49
8 Australia ..............................60.26
9 Belgium ...............................58.19
10 France .................................54.43
11 Malaysia ..............................50.44
12 Japan ...................................37.42
13 Germany ..............................37.40
14 Norway................................30.30
15 Finland.................................29.27
16 Switzerland..........................29.08
17 Canada ................................28.45
18 Brazil ...................................24.42
19 Ireland .................................22.42
20 China ...................................19.35
21 Thailand ...............................19.32
22 Chile ....................................19.04
358
23 Mexico .................................17.67
24 United Kingdom ...................17.58
25 South Africa.........................16.30
26 Singapore ............................14.43
27 Hong Kong SAR ..................14.18
28 Czech Republic.....................11.54
29 Hungary .................................7.95
30 Slovak Republic .....................5.87
31 India ......................................4.45
32 Peru .......................................4.12
33 Argentina...............................3.58
34 Indonesia ...............................1.63
35 Venezuela ..............................1.53
36 Philippines .............................1.04
37 Colombia ...............................0.41
38 Turkey....................................0.08
39 Pakistan.................................0.00
39 Poland ...................................0.00
39 Russian Federation ...............0.00
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Egypt .......................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Korea, Rep...............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Panama....................................n/a
n/a Romania ..................................n/a
n/a Saudi Arabia ............................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Vietnam ...................................n/a
SOURCES: Bank for International Settlements, Quarterly Review, June
2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation
data from the IMF, World Economic Outlook Database (April 2010)
6.14
Public domestic bond market capitalization to
GDP
This variable is the domestic debt securities issued by government as
a share of GDP | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 Japan.................................184.57
2 Italy .....................................89.27
3 Belgium ...............................61.75
4 United States.......................61.73
5 Canada ................................59.71
6 France .................................58.51
7 Hungary ..............................54.93
8 Netherlands.........................48.09
9 United Kingdom ..................46.25
10 Czech Republic....................45.97
11 Singapore ............................45.36
12 Brazil ...................................44.54
13 Germany .............................43.79
14 Malaysia ..............................43.20
15 Thailand ...............................42.61
16 Ireland .................................39.47
17 Poland .................................38.91
18 India ....................................36.99
19 Turkey..................................36.45
20 Spain ...................................36.32
21 Philippines...........................33.37
22 Austria .................................32.09
23 Venezuela ............................30.60
24 Denmark .............................29.79
25 China ...................................29.34
26 Sweden ...............................28.85
27 Pakistan ...............................27.59
28 Slovak Republic ...................26.10
29 South Africa ........................25.92
30 Colombia .............................25.06
31 Switzerland..........................23.72
32 Mexico ................................22.80
33 Hong Kong SAR...................21.81
34 Norway................................19.00
35 Australia ...............................17.24
36 Argentina.............................16.22
37 Indonesia.............................14.72
38 Peru .....................................12.42
39 Finland..................................11.12
40 Chile ......................................9.89
41 Russian Federation................3.95
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Egypt .......................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Korea, Rep...............................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Panama....................................n/a
n/a Romania ..................................n/a
n/a Saudi Arabia ............................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a Vietnam ...................................n/a
SOURCES: Bank for International Settlements, Quarterly Review, June
2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation
data from the IMF, World Economic Outlook Database (April 2010)
6.15
Private international bonds to GDP
This variable is the international debt securities issued by financial
institutions and corporations as a share of GDP | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 Ireland ...............................215.33
2 Netherlands.......................149.31
3 United Kingdom ................134.38
4 Spain .................................109.88
5 Switzerland..........................85.90
6 Belgium ...............................84.76
7 Sweden ...............................79.55
8 Germany .............................78.97
9 France ..................................67.40
10 Austria .................................66.75
11 Italy......................................51.65
12 Australia...............................51.06
13 Norway ................................47.00
14 United States ......................45.28
15 Denmark .............................44.65
16 Hong Kong SAR ..................34.17
17 Kazakhstan ..........................32.47
18 Canada ................................32.39
19 Singapore ............................29.91
20 Finland.................................28.43
21 United Arab Emirates..........28.41
22 Bahrain ................................26.07
23 Malaysia ..............................16.22
24 Korea, Rep...........................13.84
25 Hungary ...............................11.70
26 Russian Federation..............10.05
27 South Africa ..........................8.48
28 Japan .....................................7.81
29 Philippines.............................6.59
30 Mexico ..................................6.12
31 Ukraine..................................6.06
32 Israel .....................................5.61
33 Chile ......................................5.53
34 Brazil .....................................5.06
35 Czech Republic......................4.82
36 Panama .................................4.56
37 Venezuela ..............................3.76
38 India ......................................3.39
39 Thailand .................................3.29
40 Kuwait ...................................2.96
41 Saudi Arabia ..........................2.94
42 Indonesia...............................2.81
43 Peru .......................................2.55
44 Colombia ...............................2.08
45 Argentina...............................2.00
46 Turkey ....................................1.91
47 Egypt .....................................1.82
48 China .....................................0.86
49 Poland ...................................0.73
50 Slovak Republic .....................0.70
51 Pakistan.................................0.38
52 Nigeria...................................0.32
53 Vietnam .................................0.30
54 Bangladesh ...........................0.00
54 Jordan ...................................0.00
54 Morocco................................0.00
54 Romania ................................0.00
SOURCES: Bank for International Settlements, Quarterly Review, June
2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation
data from the IMF, World Economic Outlook Database (April 2010)
6.16
3: Data Tables | Financial markets
Public international bonds to GDP
This variable is the international debt securities issued by
government as a share of GDP | 2009
RANK COUNTRY/ECONOMY SCORE
1 Panama ...............................34.09
2 Belgium ...............................29.39
3 Austria .................................28.48
4 Ireland .................................25.60
5 Finland.................................24.06
6 Hungary...............................19.45
7 Philippines ...........................15.32
8 Argentina .............................15.11
9 Poland ..................................11.36
10 Italy ......................................11.03
11 Germany ...............................8.79
12 Venezuela ..............................8.26
13 Spain .....................................8.15
14 Colombia................................7.46
15 Slovak Republic......................7.44
16 Turkey.....................................7.37
17 Peru........................................7.31
18 Canada ..................................6.83
19 Sweden .................................6.17
20 Denmark................................6.01
21 Ukraine ..................................6.01
22 Mexico ..................................5.02
359
23 Czech Republic......................4.49
24 Israel .....................................4.31
25 Bahrain ..................................3.45
26 Netherlands...........................3.33
27 Brazil .....................................3.33
28 South Africa ..........................2.92
29 Romania ................................2.71
30 Indonesia...............................2.57
31 United Arab Emirates............2.53
32 Russian Federation................2.47
33 France ....................................1.88
34 Vietnam .................................1.81
35 Egypt .....................................1.81
36 Australia.................................1.50
37 Malaysia.................................1.35
38 United Kingdom.....................1.33
39 Chile ......................................1.26
40 Pakistan .................................1.14
41 Hong Kong SAR ....................0.80
42 Morocco................................0.79
43 Korea, Rep. ...........................0.70
44 Jordan ...................................0.62
45 Thailand .................................0.29
46 Singapore ..............................0.20
47 Switzerland............................0.19
48 China .....................................0.09
49 Japan.....................................0.06
50 United States ........................0.05
51 Bangladesh ...........................0.00
51 India ......................................0.00
51 Kazakhstan............................0.00
51 Kuwait ...................................0.00
51 Nigeria...................................0.00
51 Norway .................................0.00
51 Saudi Arabia ..........................0.00
SOURCES: Bank for International Settlements, Quarterly Review, June
2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation
data from the IMF, World Economic Outlook Database (April 2010)
 3: Data Tables | Financial markets
6.17
Local currency corporate bond issuance to
GDP
This is investment grade and high-yield issuance corporate bonds as
a share of GDP | 2009

RANK COUNTRY/ECONOMY SCORE

1 Thailand .................................3.71
2 United States ........................3.51
3 France ...................................3.36
4 Switzerland............................3.12
5 China .....................................3.08
6 Netherlands ...........................3.01
7 Germany ...............................2.98
8 Finland...................................2.79
9 Malaysia ................................2.36
10 Austria...................................2.00
11 Philippines .............................1.94
12 Russian Federation ................1.93
13 Chile ......................................1.89
14 Canada...................................1.84
15 Spain......................................1.68
16 Japan .....................................1.55
17 Belgium .................................1.55
18 Italy........................................1.50
19 United Kingdom.....................1.46
20 Pakistan .................................1.38
21 Singapore ..............................1.23
22 Ireland ...................................0.95
360
23 Kazakhstan ............................0.71
24 Saudi Arabia ..........................0.70
25 India ......................................0.66
26 Colombia ...............................0.61
27 Mexico ..................................0.50
28 Vietnam .................................0.50
29 Sweden .................................0.34
30 Norway..................................0.32
31 Australia ................................0.24
32 Morocco................................0.21
33 Czech Republic ......................0.17
34 Brazil......................................0.16
35 Peru .......................................0.15
36 Indonesia ...............................0.11
37 South Africa ..........................0.04
38 Argentina...............................0.02
39 Ukraine..................................0.00
40 Poland ...................................0.00
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Denmark..................................n/a
n/a Egypt .......................................n/a
n/a Hong Kong SAR ......................n/a
n/a Hungary...................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Korea, Rep...............................n/a
n/a Kuwait .....................................n/a
n/a Nigeria .....................................n/a
n/a Panama....................................n/a
n/a Romania ..................................n/a
n/a Slovak Republic .......................n/a
n/a Turkey ......................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a

SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
Data Tables

Section VII
Financial access
 3: Data Tables | Financial access
7.01
Financial market sophistication
The level of sophistication of financial markets in your country is [1 =
lower than international norms; 7 = higher than international norms] |
2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 5.07
1 Switzerland............................6.56
2 United Kingdom ....................6.55
3 Canada ..................................6.53
4 Hong Kong SAR ....................6.44
5 South Africa ..........................6.42
6 Sweden .................................6.36
7 France ...................................6.21
8 Norway..................................6.15
9 Singapore ..............................6.13
10 Australia ................................6.13
11 Finland ...................................6.10
12 Netherlands ...........................6.10
13 Brazil .....................................6.04
14 United States ........................5.99
15 Germany ...............................5.99
16 Panama .................................5.96
17 Belgium .................................5.87
18 Chile ......................................5.86
19 Israel .....................................5.80
20 Denmark ...............................5.72
21 Spain .....................................5.65
22 Austria ...................................5.63
362
23 Bahrain ..................................5.46
24 Malaysia ................................5.42
25 Saudi Arabia ..........................5.26
26 India ......................................5.20
27 United Arab Emirates ............5.17
28 Japan .....................................5.10
29 Thailand .................................5.07
30 Ireland ...................................5.04
31 Turkey....................................5.00
32 Peru .......................................4.79
33 Slovak Republic .....................4.77
34 Czech Republic......................4.67
35 Jordan ...................................4.66
36 Hungary ................................4.65
37 Mexico ..................................4.62
38 Indonesia...............................4.62
39 Philippines.............................4.53
40 Kuwait ...................................4.52
41 Morocco................................4.50
42 Colombia ...............................4.46
43 Poland ...................................4.43
44 Italy .......................................4.39
45 Korea, Rep. ...........................4.24
46 China .....................................4.16
47 Nigeria...................................4.02
48 Romania ................................3.91
49 Pakistan.................................3.87
50 Egypt.....................................3.86
51 Vietnam .................................3.76
52 Russian Federation................3.62
53 Kazakhstan ............................3.57
54 Venezuela ..............................3.50
55 Argentina...............................3.42
56 Bangladesh ...........................3.23
57 Ukraine..................................3.09
SOURCE: World Economic Forum, Executive Opinion Survey
7.02
Venture capital availability
In your country, how difficult is it for entrepreneurs with innovative
but risky projects to find venture capital? [1 = impossible; 7 = very
easy] | 2009–10 weighted average
7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.02 7
1 Hong Kong SAR ....................4.44
2 Norway..................................4.31
3 Singapore ..............................4.21
4 Finland...................................4.19
5 Sweden .................................4.00
6 Malaysia ................................3.91
7 Indonesia...............................3.86
8 Israel .....................................3.86
9 Australia ................................3.83
10 United States ........................3.81
11 Saudi Arabia ..........................3.81
12 United Arab Emirates............3.72
13 Netherlands...........................3.71
14 Bahrain ..................................3.69
15 Canada ..................................3.65
16 Switzerland............................3.46
17 Kuwait ...................................3.40
18 Belgium .................................3.34
19 China .....................................3.33
20 Panama .................................3.31
21 Denmark ...............................3.30
22 India ......................................3.25
23 France ...................................3.23
24 Chile ......................................3.16
25 United Kingdom ....................3.02
26 South Africa...........................3.01
27 Morocco................................3.00
28 Egypt.....................................2.98
29 Peru .......................................2.95
30 Austria ...................................2.93
31 Thailand .................................2.90
32 Japan.....................................2.83
33 Pakistan.................................2.81
34 Germany ...............................2.78
35 Jordan ...................................2.72
36 Poland ...................................2.68
37 Vietnam .................................2.67
38 Spain .....................................2.64
39 Brazil .....................................2.61
40 Slovak Republic .....................2.61
41 Czech Republic......................2.59
42 Colombia ...............................2.54
43 Philippines.............................2.46
44 Romania ................................2.42
45 Kazakhstan ............................2.39
46 Ireland ...................................2.30
47 Russian Federation................2.26
48 Mexico ..................................2.25
49 Bangladesh ...........................2.25
50 Korea, Rep. ...........................2.24
51 Turkey....................................2.23
52 Italy........................................2.16
53 Hungary.................................2.15
54 Venezuela ..............................1.96
55 Nigeria ...................................1.96
56 Ukraine ..................................1.95
57 Argentina ...............................1.90
SOURCE: World Economic Forum, Executive Opinion Survey
7.03
Ease of access to credit
During the past year, obtaining credit for your company has become
[1 = more difficult; 7 = easier] | 2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.06
1 Indonesia ............................4.32
2 China ..................................4.26
3 Malaysia..............................4.22
4 Saudi Arabia........................4.18
5 Egypt ..................................4.15
6 Panama...............................4.05
7 Peru ....................................4.05
8 Vietnam...............................4.01
9 Philippines ..........................3.94
10 Brazil...................................3.91
11 Bangladesh .........................3.86
12 Bahrain ...............................3.82
13 Morocco .............................3.72
14 Turkey .................................3.64
15 Japan ..................................3.62
16 India....................................3.59
17 Czech Republic ...................3.55
18 Thailand ..............................3.54
19 Singapore ...........................3.50
20 Colombia ............................3.41
21 Hong Kong SAR..................3.37
22 Pakistan ..............................3.36
23 Korea, Rep..........................3.35
24 Finland ................................3.28
25 Slovak Republic ..................3.23
26 United Arab Emirates .........3.23
27 Chile....................................3.19
28 Switzerland .........................3.12
29 Israel ...................................3.10
30 Jordan.................................3.00
31 Poland.................................2.89
32 Norway ...............................2.83
33 Italy.....................................2.82
34 Sweden ..............................2.81
35 Australia..............................2.75
36 Kuwait.................................2.67
37 United States .....................2.67
38 Canada................................2.66
39 Venezuela ...........................2.65
40 Russian Federation .............2.60
41 Nigeria ................................2.58
42 Austria ................................2.57
43 Romania .............................2.56
44 South Africa........................2.53
45 Belgium ..............................2.51
46 Mexico................................2.50
47 Kazakhstan .........................2.42
48 Argentina ............................2.40
49 Germany .............................2.35
50 France.................................2.27
51 Denmark .............................2.13
52 Netherlands ........................2.10
53 Hungary..............................2.00
54 Ukraine................................1.88
55 United Kingdom ..................1.83
56 Ireland .................................1.46
57 Spain ...................................1.44
SOURCE: World Economic Forum, Executive Opinion Survey
7.04
3: Data Tables | Financial access
Financing through local equity market
Raising money by issuing shares on the stock market in your country
is [1 = impossible; 7 = very easy] | 2009–10 weighted average
7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.89 7
1 Hong Kong SAR..................5.16
2 Saudi Arabia........................4.84
3 Singapore ...........................4.78
4 France.................................4.78
5 South Africa........................4.72
6 Canada................................4.71
7 India....................................4.69
8 Malaysia..............................4.67
9 Bangladesh .........................4.63
10 Indonesia ............................4.60
11 Australia..............................4.59
12 Norway ...............................4.57
13 Chile ...................................4.43
14 Sweden ..............................4.43
15 Switzerland .........................4.41
16 Japan ..................................4.39
17 United Arab Emirates .........4.27
18 Thailand ..............................4.25
19 Egypt ..................................4.24
20 Panama...............................4.22
21 Morocco .............................4.17
22 United Kingdom..................4.09
363
23 Jordan.................................4.09
24 Vietnam ..............................4.07
25 United States .....................4.07
26 Israel...................................4.02
27 Czech Republic ...................3.97
28 Nigeria ................................3.96
29 Kuwait.................................3.94
30 Pakistan ..............................3.94
31 Brazil...................................3.92
32 Turkey .................................3.92
33 Finland ................................3.89
34 Germany .............................3.88
35 Bahrain ...............................3.86
36 China ..................................3.85
37 Philippines ..........................3.81
38 Austria.................................3.76
39 Korea, Rep..........................3.75
40 Denmark .............................3.74
41 Netherlands ........................3.72
42 Peru ....................................3.71
43 Poland.................................3.70
44 Belgium ..............................3.61
45 Colombia ............................3.46
46 Italy.....................................3.46
47 Spain...................................3.31
48 Romania..............................3.10
49 Mexico ................................3.01
50 Ireland .................................2.76
51 Kazakhstan .........................2.75
52 Russian Federation .............2.74
53 Slovak Republic ..................2.59
54 Hungary ..............................2.59
55 Argentina ............................2.38
56 Ukraine ...............................2.35
57 Venezuela ...........................2.13
SOURCE: World Economic Forum, Executive Opinion Survey
 3: Data Tables | Financial access
7.05
Ease of access to loans
How easy is it to obtain a bank loan in your country with only a good
business plan and no collateral? [1 = impossible; 7 = very easy] |
2009–10 weighted average
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.18
1 Bahrain ..................................4.86
2 Singapore ..............................4.50
3 Finland...................................4.45
4 Saudi Arabia ..........................4.39
5 Norway..................................4.39
6 United Arab Emirates............4.28
7 Hong Kong SAR ....................4.25
8 Malaysia ................................4.21
9 Sweden .................................4.20
10 Indonesia...............................3.98
11 Panama .................................3.97
12 Australia ................................3.92
13 Belgium .................................3.90
14 Netherlands...........................3.69
15 Switzerland............................3.66
16 Chile ......................................3.65
17 Canada ..................................3.64
18 Kuwait ...................................3.62
19 Denmark ...............................3.55
20 Thailand .................................3.44
21 United States ........................3.39
22 France ...................................3.35
364
23 Peru .......................................3.33
24 India ......................................3.29
25 Pakistan.................................3.26
26 South Africa ..........................3.23
27 Austria ...................................3.20
28 Slovak Republic .....................3.19
29 Morocco ................................3.13
30 Japan.....................................3.09
31 Czech Republic......................3.08
32 Egypt.....................................3.03
33 China .....................................2.98
34 Jordan ...................................2.97
35 Israel .....................................2.93
36 Philippines.............................2.92
37 Poland ...................................2.87
38 Colombia ...............................2.86
39 Brazil .....................................2.82
40 Germany ...............................2.78
41 Vietnam .................................2.70
42 United Kingdom ....................2.68
43 Turkey....................................2.57
44 Romania ................................2.56
45 Bangladesh ...........................2.55
46 Spain .....................................2.50
47 Hungary ................................2.50
48 Mexico ..................................2.36
49 Russian Federation................2.28
50 Italy........................................2.19
51 Venezuela ..............................2.13
52 Ireland....................................2.11
53 Korea, Rep.............................2.11
54 Kazakhstan ............................2.09
55 Nigeria...................................2.00
56 Ukraine ..................................1.94
57 Argentina ...............................1.72
SOURCE: World Economic Forum, Executive Opinion Survey
7.06
Foreign direct investment to GDP
This variable is comprised of equity capital, reinvested earnings, and
intra-company loans | 2008
7 RANK COUNTRY/ECONOMY HARD DATA
1 Hong Kong SAR ..................29.90
2 Kazakhstan ..........................13.31
3 Singapore ............................12.83
4 Belgium ...............................12.69
5 Nigeria..................................11.69
6 Sweden ...............................10.77
7 Chile ....................................10.38
8 Saudi Arabia ........................10.34
9 Panama .................................9.72
10 Ukraine..................................9.20
11 Bahrain ..................................8.87
12 Vietnam .................................8.71
13 Jordan ...................................8.52
14 Romania ................................8.24
15 United Arab Emirates............5.96
16 Russian Federation................5.72
17 Czech Republic......................5.51
18 Egypt.....................................5.05
19 Hungary ................................5.03
20 Israel .....................................4.95
21 Australia ................................4.69
22 Colombia ...............................4.62
23 Spain .....................................4.48
24 United Kingdom ....................4.44
25 France ...................................4.39
26 Malaysia ................................4.21
27 Slovak Republic .....................3.87
28 Poland ...................................3.84
29 Thailand .................................3.82
30 Peru .......................................3.79
31 Austria ...................................3.55
32 Denmark ...............................3.53
33 Switzerland............................3.52
34 India ......................................3.36
35 Canada ..................................3.35
36 Pakistan.................................3.27
37 South Africa...........................3.14
38 Turkey....................................2.96
39 Brazil .....................................2.86
40 Argentina...............................2.86
41 Morocco................................2.63
42 Mexico ..................................2.51
43 United States ........................2.22
44 China .....................................2.21
45 Indonesia ...............................1.47
46 Bangladesh ............................1.15
47 Philippines.............................0.94
48 Korea, Rep. ...........................0.91
49 Italy .......................................0.80
50 Germany ................................0.74
51 Venezuela ..............................0.51
52 Japan.....................................0.48
53 Kuwait ...................................0.05
54 Norway................................–0.02
55 Netherlands.........................–0.44
56 Finland..................................–1.76
57 Ireland ..................................-8.79
SOURCES: United Nations Conference on Trade and Development, 2010;
GDP data from the IMF, World Economic Outlook Database (April
2010)
7.07
Market penetration of bank accounts
This is the number of commercial bank accounts per 100,000 adults |
2009
RANK COUNTRY/ECONOMY HARD DATA
1 Japan ...........................717,241.60
2 Belgium......................396,895.40
3 Ukraine .......................314,532.30
4 United Kingdom .........292,325.40
5 Austria ........................240,270.80
6 Singapore ...................223,624.70
7 Ireland ........................218,184.50
8 Malaysia .....................206,332.80
9 Hungary ......................205,827.10
10 United States .............202,189.20
11 Slovak Republic ..........185,782.70
12 Netherlands ................176,579.20
13 United Arab Emirates .175,064.50
14 Czech Republic ...........173,925.70
15 Turkey .........................166,120.70
16 Poland .........................162,641.10
17 Thailand ......................144,883.80
18 Colombia.....................126,743.70
19 Venezuela ...................124,638.90
20 Mexico........................109,676.30
21 Brazil...........................106,535.40
22 Israel...........................105,570.80
23 Argentina......................90,628.79
24 Jordan ..........................89,880.90
25 South Africa..................83,913.41
26 Peru ..............................78,336.68
27 Spain .............................78,047.07
28 Italy ...............................77,499.24
29 France ...........................77,198.72
30 India ..............................74,729.30
31 Chile .............................72,975.51
32 Indonesia ......................50,474.06
33 Philippines ....................49,910.37
34 Nigeria...........................46,121.01
35 Panama.........................41,192.18
36 Bangladesh ...................31,667.14
37 Morocco........................26,527.85
38 Pakistan........................22,949.28
n/a Australia ..................................n/a
n/a Bahrain ....................................n/a
n/a Canada ....................................n/a
n/a China .......................................n/a
n/a Denmark..................................n/a
n/a Egypt .......................................n/a
n/a Finland.....................................n/a
n/a Germany..................................n/a
n/a Hong Kong SAR ......................n/a
n/a Kazakhstan ..............................n/a
n/a Korea, Rep...............................n/a
n/a Kuwait .....................................n/a
n/a Norway....................................n/a
n/a Romania ..................................n/a
n/a Russian Federation..................n/a
n/a Saudi Arabia ............................n/a
n/a Sweden ...................................n/a
n/a Switzerland..............................n/a
n/a Vietnam ...................................n/a
SOURCE: Consultative Group to Assist the Poor (CGAP). 2010. “Financial
Access 2010,” Washington, DC: CGAP
7.08
3: Data Tables | Financial access
Commercial bank branches
This is the number of commercial bank branches per 100,000 adults |
2009
RANK COUNTRY/ECONOMY HARD DATA
1 Ireland ..................................57.27
2 Italy .....................................52.04
3 Belgium ...............................48.49
4 Denmark .............................45.36
5 France .................................43.21
6 Spain ...................................38.19
7 United States ......................36.33
8 Romania ..............................35.00
9 Norway................................34.49
10 Poland .................................32.21
11 Australia...............................31.86
12 Austria..................................27.54
13 Slovak Republic ...................26.64
14 Sweden ...............................25.87
15 Netherlands.........................25.36
16 Canada.................................24.11
17 Czech Republic ....................22.17
18 Hong Kong SAR...................21.19
19 United Arab Emirates..........20.85
20 United Kingdom...................20.74
21 Israel....................................19.85
22 Panama ...............................18.52
365
23 Hungary...............................18.31
24 Jordan ..................................17.79
25 Turkey...................................17.77
26 Kuwait .................................16.47
27 Germany..............................15.91
28 Chile ....................................14.92
29 Mexico ................................14.67
30 Colombia .............................14.30
31 Argentina.............................13.20
32 Brazil....................................12.71
33 Japan...................................12.46
34 Korea, Rep...........................12.27
35 Philippines............................11.81
36 Malaysia ...............................11.44
37 Thailand................................11.04
38 Singapore ............................10.54
39 India .....................................10.11
40 Morocco................................9.92
41 Pakistan.................................8.68
42 South Africa ..........................8.00
43 Indonesia................................7.74
44 Peru........................................7.31
45 Nigeria...................................6.42
46 Bangladesh............................5.16
47 Vietnam .................................3.21
48 Kazakhstan ............................2.79
49 Ukraine ..................................2.74
50 Russian Federation................2.62
51 China .....................................0.00
51 Finland...................................0.00
51 Switzerland ...........................0.00
51 Venezuela..............................0.00
n/a Bahrain ....................................n/a
n/a Egypt .......................................n/a
n/a Saudi Arabia ............................n/a
SOURCE: Consultative Group to Assist the Poor (CGAP). 2010. “Financial
Access 2010,” Washington, DC: CGAP
 3: Data Tables | Financial access
7.09
Total number of ATMs
This is the total number of ATMs per 100,000 adults | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 Canada ..............................218.55
2 United States ....................175.69
3 Australia ............................156.69
4 Spain..................................154.76
5 Belgium .............................138.32
6 United Kingdom ................122.84
7 Austria ...............................118.86
8 Germany ............................112.18
9 Brazil ..................................112.06
10 France................................105.27
11 Israel..................................104.33
12 United Arab Emirates..........99.27
13 Italy ......................................97.81
14 Ireland..................................95.74
15 Switzerland..........................93.06
16 Russian Federation..............76.51
17 Ukraine ................................71.34
18 Thailand ...............................71.32
19 Netherlands.........................64.14
20 Chile ....................................58.74
21 Norway................................56.85
22 Hungary ..............................55.62
366
23 Malaysia ..............................53.99
24 Kuwait .................................53.42
25 Romania ..............................53.21
26 South Africa ........................52.41
27 Kazakhstan ..........................52.10
28 Singapore ............................49.83
29 Slovak Republic ...................49.34
30 Poland..................................49.14
31 Mexico ................................44.80
32 Turkey..................................44.25
33 Panama ...............................40.56
34 Czech Republic....................39.91
35 Finland.................................38.31
36 Argentina.............................36.85
37 Sweden ...............................36.63
38 Colombia .............................29.56
39 Venezuela ............................28.19
40 Jordan .................................26.27
41 Peru .....................................22.26
42 Morocco ..............................18.63
43 Indonesia.............................14.44
44 Philippines ...........................14.25
45 India .......................................7.29
46 Pakistan.................................4.06
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a China .......................................n/a
n/a Denmark..................................n/a
n/a Egypt .......................................n/a
n/a Hong Kong SAR ......................n/a
n/a Japan .......................................n/a
n/a Korea, Rep...............................n/a
n/a Nigeria .....................................n/a
n/a Saudi Arabia ............................n/a
n/a Vietnam ...................................n/a
SOURCE: Consultative Group to Assist the Poor (CGAP). 2010. “Financial
Access 2010,” Washington, DC: CGAP
7.10
Total number of point of sale (POS) devices
This is the total number of POSs per 100,000 adults | 2009
RANK COUNTRY/ECONOMY HARD DATA
1 Austria .............................4,174.11
2 Australia .........................4,039.64
3 Spain ...............................3,711.27
4 Turkey.............................3,232.79
5 Norway ...........................3,014.45
6 Canada ...........................2,556.01
7 France ............................2,456.92
8 Netherlands....................2,343.41
9 United Kingdom .............2,330.70
10 Ireland ............................2,258.04
11 Brazil ...............................2,247.41
12 Singapore .......................2,091.42
13 Italy.................................2,091.02
14 Switzerland.....................1,985.35
15 Belgium ..........................1,193.42
16 Malaysia .........................1,063.09
17 Kuwait ............................1,040.14
18 Czech Republic..................868.98
19 Germany ...........................836.53
20 Hungary .............................831.30
21 Slovak Republic .................713.06
22 Poland ...............................666.71
23 Mexico ..............................592.14
24 Romania ............................540.33
25 Chile ..................................486.07
26 Colombia ...........................441.06
27 Russian Federation............293.05
28 Ukraine ...............................187.17
29 Kazakhstan ........................170.86
30 Indonesia ............................117.89
31 Morocco..............................89.93
32 India .....................................67.06
33 Finland.................................64.29
34 Peru .....................................53.96
35 Pakistan...............................48.98
n/a Argentina.................................n/a
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a China .......................................n/a
n/a Denmark..................................n/a
n/a Egypt .......................................n/a
n/a Hong Kong SAR ......................n/a
n/a Israel........................................n/a
n/a Japan .......................................n/a
n/a Jordan .....................................n/a
n/a Korea, Rep...............................n/a
n/a Nigeria .....................................n/a
n/a Panama....................................n/a
n/a Philippines ...............................n/a
n/a Saudi Arabia ............................n/a
n/a South Africa.............................n/a
n/a Sweden ...................................n/a
n/a Thailand ...................................n/a
n/a United Arab Emirates ..............n/a
n/a United States ..........................n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
SOURCE: Consultative Group to Assist the Poor (CGAP). 2010. “Financial
Access 2010,” Washington, DC: CGAP
7.11

3: Data Tables | Financial access

Microfinance institution (MFI) borrowers’
penetration rate
This is the total number of borrowers from microfinance institutions
(MFIs) as a percentage of country’s poor population | 2007

RANK COUNTRY/ECONOMY HARD DATA

1 Bangladesh ..........................41.22
2 Vietnam ...............................29.03
3 Morocco..............................22.64
4 Mexico ................................20.96
5 Indonesia.............................19.66
6 Peru ......................................17.60
7 Chile ....................................15.34
8 Jordan .................................12.45
9 Philippines............................11.03
10 Malaysia .................................7.77
11 Egypt......................................7.16
12 Colombia ...............................6.46
13 India ......................................4.80
14 South Africa...........................4.10
15 Kazakhstan ............................3.37
16 Nigeria...................................3.00
17 Pakistan.................................2.61
18 Brazil ......................................1.62
19 Panama..................................1.56
20 Romania ................................0.97
21 Argentina...............................0.81
22 Ukraine..................................0.64
367
23 Venezuela ..............................0.62
24 Russian Federation................0.54
25 Poland ...................................0.25
26 China .....................................0.19
27 Korea, Rep. ...........................0.07
28 Thailand .................................0.06
29 Turkey....................................0.03
n/a Australia ..................................n/a
n/a Austria .....................................n/a
n/a Bahrain ....................................n/a
n/a Belgium ...................................n/a
n/a Canada ....................................n/a
n/a Czech Republic........................n/a
n/a Denmark..................................n/a
n/a Finland.....................................n/a
n/a France......................................n/a
n/a Germany..................................n/a
n/a Hong Kong SAR ......................n/a
n/a Hungary...................................n/a
n/a Ireland .....................................n/a
n/a Israel........................................n/a
n/a Italy..........................................n/a
n/a Japan .......................................n/a
n/a Kuwait .....................................n/a
n/a Netherlands.............................n/a
n/a Norway....................................n/a
n/a Saudi Arabia ............................n/a
n/a Singapore ................................n/a
n/a Slovak Republic .......................n/a
n/a Spain .......................................n/a
n/a Sweden ...................................n/a
n/a Switzerland..............................n/a
n/a United Arab Emirates ..............n/a
n/a United Kingdom ......................n/a
n/a United States ..........................n/a

SOURCE: Microfinance Information Exchange, Inc. (MIX). September

2007

Technical Notes and Sources
The following section complements the Data Tables by
providing additional information and definitions for the
hard data indicators that enter the composition of the
Financial Development Index 2010. In the following
pages, the number next to the variable corresponds to
the number of the Data Table that shows the ranks and
scores for all economies on this particular indicator.
The data used in this Report represent the best
available estimates from various international agencies,
private sources, and national authorities at the time the
Report was prepared. It is possible that some data will
have been updated or revised after publication.
Section I: Institutional environment
1.01 Capital account liberalization
This index measures the degree of capital account
liberalization within a country, standardized on a 1–7
(most liberalized) scale | 2008
This variable measures specifically the level of capital controls
based on information from the IMF’s Annual Report on
Exchange Arrangements and Exchange Restrictions (AREAER).
The World Economic Forum then created an interaction term
among these data, the Legal and regulatory issues subpillar,
and the Bond market development subpillar of this Financial
Development Index, and standardized the scores on a scale
from 1 to 7.
Source: Menzie Chinn and Hiro Ito. 2010. “Financial Openness
Index.” Dataset available at http://www.ssc.wisc.edu/~mchinn/
research.html. Interaction results from World Economic Forum
analysis.
1.02 Commitments to WTO agreement on trade in services
This index measures the extent of commitments to the
WTO’s General Agreement on Trade in Services (GATS)
within the financial services sector, standardized on a
1–7 (most liberalized) scale | 2008 or most recent year
available
Each entry is assigned a standardized score on a 0–100 (most
liberalized) scale based on its relative restrictiveness. This is
done using a criteria set out by Bernard Hoekman’s methodology.
The World Economic Forum then created an interaction term
among these data, the Legal and regulatory issues subpillar,
and the Bond market development subpillar of this Financial
Development Index, and standardized the scores on a scale
from 1 to 7.
Source: The World Bank, World Trade Indicators 2008
Technical Notes and Sources
1.03 Domestic financial sector liberalization
This index measures the degree of domestic financial sector
liberalization within a country, standardized on a 1–7 (most
liberalized) scale | 2009
This index was calculated on the basis of whether or not
controls (ceilings and floors) on interest rates and credit exist,
and whether or not deposits in foreign currency are allowed.
Schmukler and Kaminsky updated their results up to 2005
for a subset of the sample countries. The World Economic
Forum used their methodology to update all of the countries
represented in the FDI for the purposes of the calculations in
this Report. National sources, central banks, and IMF reports
were the main sources of these updates. The World Economic
Forum then created an interaction term among these data, the
Legal and regulatory issues subpillar, and the Bond market
development subpillar of this Financial Development Index, and
standardized the scores on a scale from 1 to 7.
Source: Graciela Kaminsky and Sergio Schmukler, 2003.
“Short-Run Pain, Long-Run Gain: The Effects of Financial
Liberalization.” IMF Working Paper 03/34, Washington, DC: IMF.
Updated as of 2009 based on World Economic Forum analysis.
1.18 Corruption perceptions index 369
This is a composite index measuring the perceived levels of
corruption in a given country as determined by expert
assessments and opinion surveys. Higher scores indicate
less extensive corruption | 2009
This index measures the overall extent of corruption (frequency
and/or size of bribes) in the public and political sectors as
calculated based on data from 13 sources originating from
11 independent institutions. All sources provide a ranking of
countries.
Source: Transparency International, Corruption Perceptions
Index 2009
1.19 Strength of legal rights index
This index measures the degree to which collateral and
bankruptcy laws protect the rights of borrowers and lenders
and thus facilitate lending. The index ranges from 0 to 10,
with higher scores indicating that collateral and bankruptcy
laws are better designed to expand access to credit | 2009
This index includes eight features related to legal rights in collat-
eral law and two features in bankruptcy law.
Source: The World Bank, Doing Business 2010
1.20 Central bank transparency
This index measures the degree of transparency that exists
in a central bank’s policy actions. The index ranges from
0 to 15, with higher scores indicating that a central bank
operates with greater transparency | 2009
This index is the sum of scores for answers to 15 questions
assessing transparency along five dimensions: politics,
economics, procedure, policy, and operations. Questions are
taken from methodology created by Nergiz Dincer and Barry
Eichengreen in “Central Bank Transparency: Where, Why, and to
What Effect?” (2007); updated by Pierre L. Siklos. 2010.
“Central Bank Transparency: An Updated Look.” Applied
Economics Letters (forthcoming). All euro zone countries,
except the Slovak Republic, are assigned the score of the
European Central Bank.
Source: Pierre L. Siklos. 2010. “Central Bank Transparency: An
Updated Look.” Applied Economics Letters (forthcoming).
 Technical Notes and Sources
1.24 Time to enforce a contract
This variable is the time in days to resolve a dispute related
to a contract | 2009
Time is counted from the moment the plaintiff files the lawsuit
in court until payment. This includes both the days when actions
take place and the waiting periods between. The respondents
make separate estimates of the average duration of different
stages of dispute resolution: the completion of service of
process (time to file the case), the issuance of judgment (time
for the trial and obtaining the judgment), and the moment of
payment (time for enforcement).
Source: The World Bank, Doing Business 2010
1.25 Number of procedures to enforce a contract
This variable is the number of procedures from the moment
the plaintiff files a lawsuit in court until the moment of
payment | 2009
A procedure is defined as any interaction between the
parties, or between them and the judge or court officer. This
includes steps to file the case, steps for trial and judgment, and
steps necessary to enforce the judgment. This year the World
Bank’s survey allowed respondents to record procedures that
exist in civil law but not common law jurisdictions, and vice
versa. To indicate the overall efficiency of court procedures, one
procedure is now subtracted for countries that have specialized
commercial courts and one procedure for countries that allow
electronic filing of court cases.
Source: The World Bank, Doing Business 2010
1.26 Strength of investor protection index
This index assesses the strength of investor protection on a
0-to-10 (best) scale | 2009
The Strength of Investor Protection Index is the average of the
extent of disclosure index, the extent of director liability index,
370 and the ease of shareholder suits index. The index ranges from
0 to 10, with higher values indicating more investor protection.
Source: The World Bank, Doing Business 2010
1.27 Cost of enforcing contracts
This variable is the cost of enforcing contracts as a
percentage of legal claim | 2009
This variable is recorded as a percentage of the legal claim,
assumed to be equivalent to 200 percent of income per capita.
Only official costs required by law are recorded, including court
and enforcement costs and average attorney fees where the
use of attorneys is mandatory or common.
Source: The World Bank, Doing Business 2010
Section II: Business environment
2.06 Tertiary enrollment
This variable is the gross tertiary enrollment rate | 2009 or
most recent available
According to the World Bank’s World Development Indicators,
this corresponds to the ratio of total enrollment, regardless of
age, to the population of the age group that
officially corresponds to the tertiary education level. Tertiary
education, whether or not leading to an advanced research qual-
ification, normally requires, as a minimum condition of admis-
sion, the successful completion of education at the
secondary level.
Sources: UNESCO Institute for Statistics (retrieved August 24,
2010); The World Bank, World Development Indicators 2010;
national sources
2.09 Marginal tax variation
This is the variation between the top tax rate on corporate
income and the taxes and mandatory contributions paid
by a prototypical business as a percentage of commercial
profits | 2010
The top tax rate on corporate income in a country is compiled by
the Heritage Foundation from Ernst &Young, Deloitte, the IMF,
investment agencies, and governmental sources. The profit tax
rate is based on the taxes and mandatory contributions payable
by a medium-sized company in its second year of operation. To
make the data comparable across countries, several assumptions
about the business are used. These include that the business is
a limited liability, and that it is a taxable company with a gross
margin (pretax) of 20 percent and a turnover of 1,050 times
income per capita.
Sources: Top tax rate data from the Heritage Foundation, 2010
Index of Economic Freedom; profit tax data from The World
Bank, Doing Business 2010
2.10 Time to pay taxes
This is the time to prepare, file, and pay or withhold the
corporate income tax, the value-added tax, and social
security contributions (hours per year) | 2009
Preparation time includes the time to collect all information
necessary to compute the tax payable. If separate accounting
books must be kept for tax purposes, or separate calculations
made, the time associated with these processes is included.
Filing time includes the time to complete all necessary tax
forms and make all necessary calculations. Payment time is the
hours needed to make the payment online or at the tax office.
Where taxes and contributions are paid in person, the time
includes delays while waiting.
Source: The World Bank, Doing Business 2010
2.13 Internet users
This variable is Internet users per 100 inhabitants | 2008
Internet users are people with access to the worldwide
network.
Sources: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources
2.14 Broadband Internet subscribers
This variable is the total broadband Internet subscribers per
100 inhabitants | 2008
The International Telecommunication Union considers broadband
to be any dedicated connection to the Internet of 256 kilobits
per second (kb/s) or faster, in both directions. Broadband
subscribers refers to the sum of DSL, cable modem, and other
broadband (for example, fiber optic, fixed wireless, apartment
LANs, satellite connections) subscribers.
Sources: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources
2.15 Telephone lines
This variable is the number of main telephone lines per 100
inhabitants | 2008
A main telephone line is a telephone line connecting the sub-
scriber’s terminal equipment to the public switched telephone
network and that has a dedicated port in the telephone
exchange equipment.
Sources: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources

2.16 Mobile telephone subscribers
This indicator is the number of mobile cellular telephone
subscribers per 100 inhabitants | 2008
The term subscribers refers to users of mobile telephones sub-
scribing to an automatic public mobile telephone service that
provides access to the public switched telephone network
using cellular technology. This can include analogue and digital
cellular systems but should not include noncellular systems.
Subscribers to fixed wireless, public mobile data services, or
radio paging services are not included.
Sources: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources
2.17 Cost of starting a business
This indicator is the cost of starting a business as a
percentage of income per capita | 2009
This variable measures the official fees and fees for legal or pro-
fessional services if such services are required by law to start a
new business. Fees for purchasing and legalizing
company books are included if these transactions are required
by law. The company law, the commercial code, and specific
regulations and fee schedules are used as sources for
calculating costs. In the absence of fee schedules, a govern-
ment officer’s estimate is taken as an official source. In the
absence of a government officer’s estimate, estimates of
incorporation lawyers are used. If several incorporation lawyers
provide different estimates, the median reported value is
applied. In all cases the cost excludes bribes.
Source: The World Bank, Doing Business 2010
2.18 Cost of registering property
This variable is the cost of registering property as a
percentage of income per capita | 2009
This variable is a percentage of the property value, assumed to
be equivalent to 50 times income per capita. Only official costs
required by law are recorded; these include fees, transfer taxes,
stamp duties, and any other payment to the property registry,
notaries, public agencies, or lawyers. Other taxes, such as
capital gains tax or value-added tax, are excluded from the cost
measure. Both costs borne by the buyer and those borne by the
seller are included. If cost estimates differ among sources, the
median reported value is used.
Source: The World Bank, Doing Business 2010
2.19 Cost of closing a business
This variable is the cost of closing a business as a
percentage of the estate | 2009
The cost of the proceedings is recorded as a percentage of
the estate’s value. The cost is calculated on the basis of survey
responses by insolvency practitioners and includes court fees
as well as fees of insolvency practitioners, independent asses-
sors, lawyers, and accountants. Respondents provide cost
estimates from among the following options: less than 2%,
2–5%, 5–8%, 8–11%, 11–18%, 18–25%, 25–33%, 33–50%,
50–75%, and more than 75% of the value of the business
estate.
Source: The World Bank, Doing Business 2010
2.20 Time to start a business
This variable is the time in days to start a business | 2009
The measure captures the median duration that property
lawyers, notaries, or registry officials indicate is necessary
to complete a procedure. It is assumed that the buyer does
not waste time and commits to completing each remaining
procedure without delay. If a procedure can be accelerated for
an additional cost, the fastest legal procedure that is available
and used by the majority of property owners is chosen. If pro-
cedures can be undertaken simultaneously, it is assumed that
they are. It is assumed that the parties involved are aware of
all regulations and their sequence from the beginning.
Source: The World Bank, Doing Business 2010
Technical Notes and Sources
2.21 Time to register property
This variable is the time in days to register property | 2009
The measure captures the median duration that property
lawyers, notaries, or registry officials indicate is necessary
to complete a procedure. It is assumed that the buyer does
not waste time and commits to completing each remaining
procedure without delay. If a procedure can be accelerated
for an additional cost, the fastest legal procedure available and
used by the majority of property owners is chosen. If proce-
dures can be undertaken simultaneously, it is assumed that
they are. It is assumed that the parties involved are aware of
all regulations and their sequence from the beginning.
Source: The World Bank, Doing Business 2010
2.22 Time to close a business
This variable is the time in years to close a business | 2009
Information is collected on the sequence of procedures and
on whether any procedures can be carried out simultaneously.
Potential delay tactics by the parties, such as the filing of dilatory
appeals or requests for extension, are taken into consideration.
Source: The World Bank, Doing Business 2010
Section III: Financial stability
3.01 Change in real effective exchange rate (REER)
This is the average percentage change in real effective
exchange rate from year to year over the period 2005–09.
Higher REER represents appreciation | As of 2009
Real effective exchange rates (REERs) are available only for a
subgroup of rated countries and come from two main sources:
JP Morgan and the IMF. The JP Morgan REER index relies on
available measures of the prices of domestically produced fin- 371
ished manufactured goods (excluding primary food and energy),
while the IMF index is based on consumer prices. Cross-coun-
try comparisons are therefore difficult, but changes over time
for individual countries still give a rough indication of the evolu-
tion of relative costs. This variable relies on available measures
of the prices of domestically produced finished manufactured
goods and consumer prices.
Source: Moody’s Country Credit Statistical Handbook (May
2010)
3.02 External vulnerability indicator
The external vulnerability indicator is the sum of several
measures of external exposure as a percentage of foreign
exchange reserves | 2009
This variable is the short-term external debt + currently matur-
ing long-term external debt + total nonresident deposits over
one year / official foreign-exchange reserves (%).
Source: Moody’s Country Credit Statistical Handbook (May
2010)
3.03 Current account balance to GDP
This variable is the three-year average of current account
balance to GDP provides an indicator of the difficulty a
country might have in mobilizing the foreign exchange
necessary for debt service | 2007-2009
Balance of payments data are based upon the methodology of
the 5th edition of the IMF’s Balance of Payments Manual
(1993).
Source: IMF, World Economic Outlook Database (April 2010)
3.04 Dollarization vulnerability indicator
This variable measures the risk of payment crisis and
default originating from the presence of a large amount
of dollarization in the domestic banking system | 2009
This variable is foreign-currency deposits in domestic banks /
official foreign-exchange reserves + foreign assets of domestic
banks (%).
Source: Moody’s Country Credit Statistical Handbook (May 2010)
 Technical Notes and Sources
3.05 External debt to GDP (developing economies)
This variable is the external debt as a percentage of GDP |
2009
This variable measures the total debt held by nonresidents,
regardless of the currency in which the debt is denominated,
as a share of GDP for emerging markets only.
Source: Moody’s Country Credit Statistical Handbook (May 2010)
3.06 Net international investment position to GDP
(advanced economies)
This variable is the net international investment position as
a percentage of GDP | 2009
For advanced economies only, this variable measures the role
they play in the international movement of capital. The estimate
is based on the difference between the market value of an
economy’s foreign assets and that of its liabilities relative to
GDP.
Source: Moody’s Country Credit Statistical Handbook (May 2010)
3.07 Frequency of banking crises
This variable is calculated based on the number of banking
crises that countries experienced from 1970 to 2010. Recent
crises are weighted more heavily | As of 2010
The crisis count includes systemic banking crises (defined as
much or all of bank capital being exhausted), excluding banking
system distress events that affected isolated banks and were
neither fully nor borderline systemic in nature.
Source: Luc Laeven and Fabian Valencia. 2008. “Systemic
Banking Crises: A New Database.” IMF Working Paper 08/224,
Washington, DC: IMF. Updated June 2010. All weighting is
based on World Economic Forum analysis.
372 3.08 Financial strengths indicator
This is the weighted average financial strength rating by
bank assets | 2010
This indicator is a measure of a country’s banks’ ability to
meet obligations to depositors and other creditors as viewed by
specialized analysts. It incorporates quantitative and qualitative
information on a country’s banks’ operating environment. The
sample is restricted to larger banks in each country.
Source: Moody’s Country Credit Statistical Handbook (May 2010)
3.09 Aggregate measure of real estate bubbles
This is the aggregate measure of real estate bubbles based
on price-to-income ratio and price-to-rent ratio | 2009
Price-to-income ratio calculated as (price per square meter/ GDP
per capita) X 100. Price-to-rent ratio is annual rental income
expressed as a percentage of property purchase price.
Source: Global Property Guide website (data retrieved August 4,
2010), www.globalpropertyguide.com
3.10 Financial Stress Index
This measures the extent to which a country’s financial
system is under strain | 2009
Index for advanced economies is the sum of the following
seven standardized subcomponents: 12-month rolling beta
of Bank Stock Index, TED or interbank spread, corporate bond
yield spread, inverted term spread, monthly stock returns
(measured as declines), Generalized Auto-Regressive
Conditional Heteroskedasticity (GARCH) volatility of monthly
stock returns, and real effective exchange rates. Index for
emerging economies is the sum of the following five standard-
ized subcomponents: 12-month rolling beta of Bank Stock
Index, monthly stock returns (measured as declines), GARCH
volatility of monthly stock returns, sovereign debt spreads,
and Exchange Market Pressure Index.
Source: Ravi Balakrishnan, Stephan Danninger, Selim Elekdag,
and Irina Tytell. 2009. The Transmission of Financial Stress from
Advanced to Emerging Economies. Washington DC: IMF.
3.11 Tier 1 capital ratio
This is the weighted average Tier 1 regulatory capital ratio
at the 10 largest banks | 2009 or most recent available
This ratio is calculated based on the weighted average of assets
held by the top 10 bank holding and holding companies, com-
mercial banks, cooperative banks, Islamic banks, savings banks,
and specialized governmental credit institutions in each country.
The ratio is excluded for countries in which data are not avail-
able for the majority of the top 10 banks by assets.
Source: BankScope database, data retrieved July 2010
3.12 Output loss during banking crises
This is the difference between actual and trend real GDP
during a banking crisis. Output loss during recent crises is
weighted more heavily | 2010
The crisis count includes systemic banking crises (defined as
much or all of bank capital being exhausted), excluding banking
system distress events that affected isolated banks and were
neither fully nor borderline systemic in nature. Output loss is
expressed as a percentage of trend real GDP for the period [T,
T + 3] where T is the starting year of the crisis. Trend real GDP
is computed by applying an HP filter ( = 100) to the GDP series
over [T – 20, T – 1]. No output losses are reported for crises in
transition economies that took place during the period of transi-
tion to market economies.
Source: Luc Laeven and Fabian Valencia. 2008. “Systemic
Banking Crises: A New Database.” IMF Working Paper 08/224,
Washington, DC: IMF. Updated June 2010. All weighting is
based on World Economic Forum analysis.
3.13 Local currency sovereign rating
This variable measures the probability that a country will pay
its local currency borrowing in a full and timely manner |
2010
Foreign currency sovereign credit ratings of Standard and Poor’s
were converted on a linear numerical scale from 0 (reflecting
SD) to 20 (reflecting AAA). Credit outlooks were given either a
positive 0.3 or a negative 0.3 to be added or taken off of the
actual rating of a country.
Source: Standard and Poor’s, July 2010
3.14 Foreign currency sovereign rating
This variable measures the probability that a country will
pay its foreign currency borrowing in a full and timely
manner | 2010
Foreign currency sovereign credit ratings of Standard and Poor’s
were converted on a linear numerical scale from 0 (reflecting
SD) to 20 (reflecting AAA). Credit outlooks were given either a
positive 0.3 or a negative 0.3 to be added or taken off of the
actual rating of a country.
Source: Standard and Poor’s, July 2010
3.15 Aggregate macroprudential indicator
This is the aggregate measure of macroprudential sound-
ness based on real GDP growth, deposit interest rate,
inflation volatility, and inflation level | 2009 or most recent
available
This measure is calculated as the mean of four normalized vari-
ables: year-over-year growth of real GDP, deposit interest rate,
standard deviation of month-over-month change in consumer
price index during a one-year period, and annual percentage
change in average consumer prices. All data are as of 2009
except deposit interest rates, for which the latest available data
are as of 2008.
Sources: GDP and inflation level data from the IMF, World
Economic Outlook Database (April 2010); deposit interest rate
data from the World Bank, Financial Development Indicators,
retrieved August 2010; inflation volatility data from Bloomberg,
retrieved September 2010
 Technical Notes and Sources
3.16 Manageability of public debt 4.03 Financial system deposits to GDP
This variable is based on total debt owed by government This variable shows the demand, time, and saving deposits
to domestic residents, foreign nationals, and multilateral in deposit-money banks and other financial institutions as a
institutions as a percentage of GDP | 2009 share of GDP | 2008
The total debt includes both local and foreign currency owed The ratio is calculated using the following deflation method:
by government to domestic residents, foreign nationals, and
multilateral institutions such as the IMF, and is expressed as a
percentage of GDP. The values are standardized on a 1–7 scale. (0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
Sources: Public debt data from the Economist Intelligence Unit
GDPt
CountryData Database, data retrieved August 2010; GDP data
from the IMF, World Economic Outlook Database (April 2010) P_at

where F is demand and time and savings deposits, P_e is

3.17 Credit default swap spreads end-of-period CPI, and P_a is average annual CPI.

This measure shows the spreads on sovereign credit default Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
swaps | 2010 2000. “A New Database on Financial Development and
This indicator reflects pricing of five-year senior credit default Structure.” World Bank Economic Review 14: 597–605. Updated
swaps for the government sector. May 2009

Sources: CMA DataVision and Markit CDS, data retrieved July

2010 4.04 M2 to GDP
This variable is the money and quasi-money supply as a
percentage of GDP | 2009
This variables shows money and quasi-money as a percentage
Section IV: Banking financial services of GDP, calculated using the following deflation method:

4.01 Deposit money bank assets to GDP

These are claims on domestic real nonfinancial sector by
(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
deposit money banks as a share of GDP | 2008
GDPt
The ratio is calculated using the following deflation method:
P_at

(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
where F is money and quasi-money, P_e is end-of-period CPI,
and P_a is average annual CPI.

GDPt Sources: M2 supply data from the Economist Intelligence Unit

P_at CountryData Database, data retrieved August 2010; GDP data
from the IMF, World Economic Outlook Database (April 2010) 373
where F is deposit money bank claims, P_e is end-of-period
CPI, and P_a is average annual CPI.
4.05 Private credit to GDP
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. This variable shows private credit by deposit-money banks
2000. “A New Database on Financial Development and and other financial institutions as a percentage of GDP |
Structure.” World Bank Economic Review 14: 597–605. Updated 2008
May 2009 The ratio is calculated using the following deflation method:

4.02 Central bank assets to GDP

These are claims on domestic real nonfinancial sector by
(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
the central bank as a share of GDP | 2008
GDPt
The ratio is calculated using the following deflation method:
P_at

(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
where F is credit to the private sector, P_e is end-of-period CPI,
and P_a is average annual CPI.

GDPt Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.

P_at 2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. Updated
where F is central bank claims, P_e is end-of-period CPI, and May 2009
P_a is average annual CPI.

Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 4.06 Bank deposits to GDP
2000. “A New Database on Financial Development and This variable shows the demand, time, and savings
Structure.” World Bank Economic Review 14: 597–605. Updated deposits in deposit-money banks as a share of GDP | 2008
May 2009 The ratio is calculated using the following deflation method:

(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
GDPt
P_at

where F is demand and time and savings deposits, P_e is

end-of period CPI, and P_a is average annual CPI.

Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.

2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. Updated
May 2009
 Technical Notes and Sources
4.07 Money market instruments to GDP
This variable is total money market instruments (US$ bil-
lions) as a percentage of GDP | 2009
Figures are based on the residence of the issuer.
Sources: Bank for International Settlements, Quarterly Review
June 2010; GDP data from the IMF, World Economic Outlook
Database (April 2010)
4.08 Aggregate profitability indicator
This variable is based on a three-year average of three
measures of profitability: net interest margin, bank return
on assets, and bank return on equity | 2006–08
Net interest margin is the accounting value of bank’s net
interest revenue as a share of its interest-bearing (total earning)
assets. Bank return on assets calculated as net income as a
percentage of total assets. Bank return on equity calculated
as net income as a percentage of total shareholders’ equity.
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. Updated
May 2009
4.09 Bank overhead costs
This is bank overhead costs as a percentage of total assets
| 2008
This is calculated as an average for each country in 2007.
Approximately 90 percent of the banking sector assets in a
given country and year are covered in the sourced database.
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. Updated
May 2009
374
4.1 Public ownership of banks
This variable is the percentage of assets held by the 10
largest banks that is located in banks that are more than
25 percent government-owned | 2009 or most recent
available
This figure is based on bank holding and holding companies,
commercial banks, cooperative banks, Islamic banks, savings
banks, and specialized governmental credit institutions in each
country. Banks owned by public authorities in foreign countries
are not included in this measure.
Source: BankScope database, data retrieved July 2010
4.11 Bank operating costs to assets
This is non-interest expense as a percentage of average
assets in last reported year | 2009 or most recent available
This ratio is calculated based on the weighted average of assets
held by the top 10 bank holding and holding companies, com-
mercial banks, cooperative banks, Islamic banks, savings banks,
and specialized governmental credit institutions in each country.
Source: BankScope database, data retrieved July 2010
4.12 Non-performing bank loans to total loans
This variable is the percentage of non-performing bank
loans relative to total number of loans outstanding | 2009
Figures are sourced from national authorities and IMF staff
estimates. Due to differences in national accounting, taxation,
and supervisory regimes, IMF Financial Soundness Indicators
are not strictly comparable across countries.
Source: IMF, Global Financial Stability Report, October 2010
4.13 Private credit bureau coverage
This variable is the percentage of adults covered by a
private credit registry | 2009
This figure includes information on repayment history, unpaid
debts, and credit outstanding.
Source: The World Bank, Doing Business 2010
4.14 Public credit registry coverage
This variable is the percentage of adults covered by a public
credit registry | 2009
This figure includes information on repayment history, unpaid
debts, and credit outstanding.
Source: The World Bank, Doing Business 2010
Section V: Non-banking financial services
5.01 IPO market share
This is the three-year average of percentage of world
initial public offerings (IPOs) issued in a given country as
measured by US dollars | 2007–09
IPOs are issues where the common stock has never traded
publicly in any market and is offered in its initial public offering.
Annual volumes accumulate the proceeds amount + over-
allotment sold (US$ millions), which is the amount of the issue
in this market plus the over-allotment amount (a.k.a. green shoe)
sold in this market, for all issues based on the issue/announce-
ment date. Market share calculation is based on IPOs in the 57
economies included in the FDI.
Source: Dealogic Analytics, data retrieved July 2010
5.02 IPO proceeds amount
This is the three-year average of total initial public offering
(IPO) proceeds as a percentage of GDP | 2007–09
This variable represents IPO proceeds as a percentage of GDP.
The initial public offering (IPO) proceeds amount is calculated
when the common stock has never before traded publicly in any
market. Annual volumes accumulate as the proceeds amount +
over-allotment sold (US$ millions), which is the amount of the
issue in this market plus the over-allotment amount (a.k.a. green
shoe) sold in this market, for all issues based on the
issue/announcement date.
Sources: Dealogic Analytics, data retrieved July 2010; GDP data
from the IMF, World Economic Outlook Database (April 2010)
5.03 Share of world IPOs
This is the three-year average of the number of initial public
offering (IPO) issues as a percentage of total global number
of issues | 2007–09
This variable counts the number of IPO issues as defined in
the IPO proceeds amount variable and shows the percentage of
the total global issuance in number of issues attributable to that
country. Share calculation is based on IPOs in 57 economies
included in Index.
Source: Dealogic Analytics, data retrieved July 2010
5.04 M&A market share
This is the three-year average of the dollar value of mergers
and acquisitions (M&As) occurring in a given country as a
percentage of the total global value | 2007–09
This indicator is the percentage of the total world rank value
of the transaction in US dollars (including the net debt of the
target) attributable to a given country. The rank value is
calculated by subtracting the value of any liabilities assumed
in a transaction from the transaction value and by adding the
target’s net debt (US$ millions). Net debt is (straight debt +
short-term debt + preferred equity) – (cash and marketable
securities as of the date of the most current financial information
prior to the announcement of the transaction). Preferred equity
is not included if the cost to acquire preferred shares (CSTPFD)
is filled in. Market share calculation is based on M&A transac-
tions in 57 economies included in Index.
Sources: Dealogic Analytics, data retrieved July 2010; GDP data
from the IMF, World Economic Outlook Database (April 2010)

5.05 M&A transaction value to GDP
This variable is the rank value of the three-year average of
mergers and acquisitions (M&A) transactions in US dollars
(including the net debt of the target) as a percentage of
GDP | 2007–09
The rank value is calculated by subtracting the value of any
liabilities assumed in a transaction from the transaction value
and by adding the target’s net debt (US$ millions). Net debt is
(straight debt + short-term debt + preferred equity) – (cash
and marketable securities as of the date of the most current
financial information prior to the announcement of the trans-
action). Preferred equity is not included if the cost to acquire
preferred shares (CSTPFD) is filled in.
Sources: Dealogic Analytics, data retrieved July 2010; GDP data
from the IMF, World Economic Outlook Database (April 2010)
5.06 Share of total number of M&A deals
This is the three-year average of the percentage of world
mergers and acquisitions (M&A) deals occurring in a given
country as measured by the share of the total number of
global M&A deals | 2007–09
This is the percentage of total world rank value of transactions
in US dollars (including the net debt of the target), attributable
to a particular country. The rank value is calculated by subtract-
ing the value of any liabilities assumed in a transaction from
the transaction value and by adding the target’s net debt
(US$ millions). Net debt is (straight debt + short-term debt +
preferred equity) – (cash and marketable securities as of the
date of the most current financial information prior to the
announcement of the transaction). Preferred equity is not
included if the cost to acquire preferred shares (CSTPFD) is
filled in. Share calculation is based on M&A transactions in
57 economies included in the Index.
Sources: Dealogic Analytics, data retrieved July 2010; GDP data
from the IMF, World Economic Outlook Database (April 2010)
5.07 Life insurance density
This variable is the direct life insurance premiums from
domestic sources to GDP | 2009
Only premium income from domestic risks is used to calculate
insurance penetration and density. Cross-border business is not
included.
Sources: Swiss Re, World Insurance in 2009: Premiums
Dipped, but Industry Capital Improved; GDP data from the IMF,
World Economic Outlook Database (April 2010)
5.08 Non–life insurance density
This variable is the direct non-life insurance premiums from
domestic sources to GDP | 2009
Only premium income from domestic risks is used to calculate
insurance penetration and density. Cross-border business is not
included.
Source: Swiss Re, World Insurance in 2009: Premiums Dipped,
but Industry Capital Improved; GDP data from the IMF, World
Economic Outlook Database (April 2010)
5.09 Real growth of direct insurance premiums
This is the annual real rate of growth (%) of direct premiums
(life and non-life) based on local currency prices | 2008
Real growth rates are calculated using premiums in local
currencies and adjusted for inflation using the consumer price
index for each country.
Source: Swiss Re, World Insurance in 2008: Emerging Markets
Leading the Way
5.1 Life insurance coverage
This is the direct domestic premiums for life insurance to
per capita GDP | 2009
Only premium income from domestic risks is used to calculate
insurance penetration and density. Cross-border business is not
included.
Sources: Swiss Re, World Insurance in 2009: Premiums
Dipped, but Industry Capital Improved; GDP data from the IMF,
World Economic Outlook Database (April 2010)
Technical Notes and Sources
5.11 Non–life insurance coverage
This is the direct domestic premiums for non-life
insurance to per capita GDP | 2009
Only premium income from domestic risks is used to calculate
insurance penetration and density. Cross-border business is not
included.
Source: Swiss Re, World Insurance in 2009: Premiums Dipped,
but Industry Capital Improved; GDP data from the IMF, World
Economic Outlook Database (April 2010)
5.12 Relative value-added of insurance to GDP
This is the value added by insurance and pension services
to the economy after costs are subtracted, as a percentage
of GDP | 2009
This indicator represents what remains of total sales revenue
after the costs of providing insurance and pension products are
taken out, signifying the value that the insurance and pension
sector creates in the economy. Figures are preliminary and
subject to change.
Source: Global Insight, World Industry Services, August 2010
5.13 Securitization to GDP
This is the three-year average of the sum of asset-backed
securities (ABS), mortgage-backed securities (MBS),
high-yield bonds, and highly leveraged loans deal value as
a percentage of GDP | 2007–09
This figure is calculated based on a three-year average GDP.
Sources: Dealogic Analytics, data retrieved July 2010; GDP data
from the IMF, World Economic Outlook Database (April 2010)
5.14 Share of total number of securitization deals
This is the three-year average of the sum of asset-backed
securities (ABS), mortgage-backed securities (MBS), 375
high-yield bonds, and highly leveraged loans deals as a
percentage of total deals | 2007–09
This figure is calculated based on a three-year average of
securitization deals.
Source: Dealogic Analytics, data retrieved July 2010
VI: Financial markets
6.01 Spot foreign exchange turnover
This is the percentage share of the world total of spot
foreign exchange turnover | April 2007
Transactions are measured in US dollars and involve the
exchange of two currencies at a rate agreed upon on the date
of the contract for value of delivery at a time less than two
days into the future. The spot legs of swaps were not included
among spot transactions but were treated as swap transactions
even when they were for settlement within two days (i.e.,
including “tomorrow/next day” transactions). Percentages
are based on the 57 economies included in the FDI.
Source: Bank for International Settlements, Triennial Central
Bank Survey, December 2007
6.02 Outright forward foreign exchange turnover
This is the percentage share of the world total of outright
forward foreign exchange turnover | April 2007
Transactions are measured in US dollars and involve the
exchange of two currencies at a rate agreed upon on the date
of the contract for value of delivery at a time more than two
days into the future. Percentages are based on the 57
economies included in the FDI.
Source: Bank for International Settlements, Triennial Central
Bank Survey, December 2007
 Technical Notes and Sources
6.03 Foreign exchange swap turnover
This is the percentage share of the world total of foreign
exchange swap turnover | April 2007
Transactions are measured in US dollars and involve the actual
exchange of two currencies (principal amount only) on a
specific date at a rate agreed upon at the time of conclusion
of the contract (the short leg), and a reverse exchange of the
same two currencies at a date further in the future and at a
rate (generally different from the rate applied to the short leg)
agreed at the time of the contract (the long leg). Both spot/
forward and forward/forward swaps are included. Short-term
swaps carried out as “tomorrow/next day” transactions are also
included in this category. Percentages are based on the 57
economies included in the FDI.
Source: Bank for International Settlements, Triennial Central
Bank Survey, December 2007
6.04 Interest rate derivatives turnover: Forward rate
agreements
This is the percentage share of world total of over-the-
counter single currency forward interest rate agreements
turnover | April 2007
Transactions are measured in US dollars and involve interest
rate forward contracts in which the rate to be paid or received
on a specific obligation for a set period of time, beginning at
some time in the future, is determined at contract initiation.
Percentages are based on the 57 economies included in the
FDI.
Source: Bank for International Settlements, Triennial Central
Bank Survey, December 2007
6.05 Interest rate derivatives turnover: Swaps
This is the percentage share of the world total of over-the-
counter single currency interest rate swaps turnover | April
376 2007
Transactions are measured in US dollars and involve agree-
ments to exchange periodic payments related to interest rates
on a single currency; these can be fixed for floating, or floating
for floating based on different indices. This group includes those
swaps whose notional principal is amortized according to a
fixed schedule independent of interest rates. Percentages are
based on the 57 economies included in the FDI.
Source: Bank for International Settlements, Triennial Central
Bank Survey, December 2007
6.06 Interest rate derivatives turnover: Options
This is the percentage share of the world total of over-the-
counter interest rate options turnover | April 2007
Transactions are measured in US dollars and involve option
contracts that give the right to pay or receive a specific interest
rate on a predetermined principal for a set period of time.
Percentages are based on the 57 economies included in the
FDI.
Source: Bank for International Settlements, Triennial Central
Bank Survey, December 2007
6.07 Foreign exchange derivatives turnover: Currency swaps
This is the percentage share of the world total of over-the-
counter foreign exchange currency swaps turnover | April
2007
Transactions are measured in US dollars and involve contracts
that commit two counterparties to exchange streams of
interest payments in different currencies for an agreed period of
time and to exchange principal amounts in different
currencies at a pre-agreed exchange rate at maturity.
Percentages are based on the 57 economies included in the
FDI.
Source: Bank for International Settlements, Triennial Central
Bank Survey, December 2007
6.08 Foreign exchange derivatives turnover: Options
This is the percentage share of the world total of over-the-
counter foreign exchange options turnover | April 2007
Transactions are measured in US dollars and involve contracts
that give the right to buy or sell a currency with another
currency at a specified exchange rate during a specified period.
This category also includes exotic foreign exchange options
such as average rate options and barrier options. Percentages
are based on the 57 economies included in the FDI.
Source: Bank for International Settlements, Triennial Central
Bank Survey, December 2007
6.09 Stock market turnover ratio
This is the ratio of the value of total shares traded to aver-
age real market capitalization | 2008 or most recent year
available
The denominator is deflated using the following method:
Tt
P_at
,
(0.5) × [ Mt
P_et
+
Mt –1
P_et –1 ]
where T is total value traded, M is stock market capitalization,
P_e is end-of-period CPI, and P_a is average annual CPI.
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. Updated
May 2009
6.10 Stock market capitalization to GDP
This indicator is the value of listed shares as a percentage
of GDP | 2008 or most recent year available
The ratio is calculated using the following deflation method:
(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
GDPt
P_at
where F is stock market capitalization, P_e is end-of-period CPI,
and P_a is average annual CPI.
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. Updated
May 2009
6.11 Stock market value traded to GDP
This is the total value of shares traded on stock market
exchanges as a percentage of GDP | 2008
Value of shares traded and GDP are measured over the same
time period.
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. Updated
May 2009
6.12 Number of listed companies per 10,000 people
This is the number of publicly listed companies per 10,000
people | 2008
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. Updated
May 2009

6.13 Private domestic bond market capitalization to GDP
This variable is the domestic debt securities issued by
financial institutions and corporations as a share of GDP |
2009
Ratio is calculated using the following deflation method:
Technical Notes and Sources
6.16 Public international bonds to GDP
This variable is the international debt securities issued by
government as a share of GDP | 2009
This figure shows international debt securities issued by
government and is based on the nationality of issuer. The ratio
is calculated using the following deflation method:

(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] , (0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ]
GDPt ,
P_at GDPt
P_at
where F is amount outstanding of private domestic debt
securities, P_e is end-of-period CPI, and P_a is average annual where F is amount outstanding of public international debt
CPI. securities, P_e is end-of-period CPI, and P_a is average annual
CPI.
Sources: Bank for International Settlements, Quarterly Review,
June 2010, http://www.bis.org/statistics/secstats.htm; GDP and Sources: Bank for International Settlements, Quarterly Review,
inflation data from the IMF, World Economic Outlook Database June 2010, http://www.bis.org/statistics/secstats.htm; GDP and
(April 2010) inflation data from the IMF, World Economic Outlook Database
(April 2010)

6.14 Public domestic bond market capitalization to GDP

This variable is the domestic debt securities issued by 6.17 Local currency corporate bond issuance to GDP
government as a share of GDP | 2009 This is investment grade and high-yield issuance corporate
Ratio is calculated using the following deflation method: bonds as a share of GDP | 2009
Corporate bonds consist of industrial and utility businesses; this

(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
variable excludes all financial firms.

Sources: Dealogic Analytics, data retrieved July 2010; GDP data

GDPt
P_at
where F is amount outstanding of public domestic debt
securities, P_e is end-of-period CPI, and P_a is average annual
CPI.
Sources: Bank for International Settlements, Quarterly Review,
June 2010, http://www.bis.org/statistics/secstats.htm; GDP and
inflation data from the IMF, World Economic Outlook Database
(April 2010)
6.15 Private international bonds to GDP
This variable is the international debt securities issued by
financial institutions and corporations as a share of GDP |
2009
This variable shows international debt securities issued by finan-
cial institutions and corporate issuers, and is based on the
nationality of the issuer. The ratio is calculated using the follow-
ing deflation method:
from the IMF, World Economic Outlook Database (April 2010)
VII: Financial access
7.06 Foreign direct investment to GDP
This variable is comprised of equity capital, reinvested
earnings, and intra-company loans | 2008 377
Equity capital is the foreign direct investor’s purchase of shares
of an enterprise in a country other than that of its residence.
Reinvested earnings comprise of the foreign direct investor’s
share (in proportion to direct equity participation) of earnings not
distributed as dividends by affiliates or earnings not remitted to
the foreign direct investor. Such retained profits by affiliates are
reinvested. Intra-company loans or intra-company debt trans-
actions refer to short- or long-term borrowing and lending of
funds between foreign direct investors (parent enterprises) and
affiliate enterprises.
Sources: United Nations Conference on Trade and
Development, 2010; GDP data from the IMF, World Economic
Outlook Database (April 2010)

(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] , 7.07 Market penetration of bank accounts
GDPt This is the number of commercial bank accounts per
P_at 100,000 adults | 2009
These data are collected as part of an access to a finance
where F is amount outstanding of private international debt questionnaire administered in February 2010. The survey was
securities, P_e is end-of-period CPI, and P_a is average annual directed to the central bank governor’s office or head office of
CPI. the financial regulator for approval and assignment to a contact
person responsible for gathering the appropriate information.
Sources: Bank for International Settlements, Quarterly Review,
Response was received from 142 countries.
June 2010, http://www.bis.org/statistics/secstats.htm; GDP and
inflation data from the IMF, World Economic Outlook Database Source: Consultative Group to Assist the Poor (CGAP). 2010.
(April 2010) “Financial Access 2010,” Washington, DC: CGAP.

7.08 Commercial bank branches

This is the number of commercial bank branches per
100,000 adults | 2009
These data are collected as part of an access to a finance
questionnaire administered in February 2010. The survey was
directed to the central bank governor’s office or head office of
the financial regulator for approval and assignment to a contact
person responsible for gathering the appropriate information.
Response was received from 142 countries.

Source: Consultative Group to Assist the Poor (CGAP). 2010.

“Financial Access 2010,” Washington, DC: CGAP.
 Technical Notes and Sources

7.09 Total number of ATMs

This is the total number of ATMs per 100,000 adults | 2009
These data are collected as part of an access to a finance
questionnaire administered in February 2010. The survey was
directed to the central bank governor’s office or head office of
the financial regulator for approval and assignment to a contact
person responsible for gathering the appropriate information.
Response was received from 142 countries.

Source: Consultative Group to Assist the Poor (CGAP). 2010.

“Financial Access 2010,” Washington, DC: CGAP.

7.10 Total number of point of sale (POS) devices

This is the total number of POSs per 100,000 adults | 2009
These data are collected as part of an access to a finance ques-
tionnaire administered in February 2010. The survey was direct-
ed to the central bank governor’s office or head office of the
financial regulator for approval and assignment to a contact per-
son responsible for gathering the appropriate information.
Response was received from 142 countries.

Source: Consultative Group to Assist the Poor (CGAP). 2010.

“Financial Access 2010,” Washington, DC: CGAP.

7.11 Microfinance institution (MFI) borrowers’ penetration

rate
This is the total number of borrowers from microfinance
institutions (MFIs) as a percentage of country’s poor
population | 2007
The total number of poor people is calculated based on national
poverty rates. When national poverty rates are not available,
forecasted poverty rates are used only for illustrative purposes.
Two different methods were used to calculate the forecasted
poverty rates. In the first one, poverty was predicted based on
both $1/day and $2/day poverty rates, and the minimum of the
prediction and the $2/day rate was used. In the second, the
378
prediction was made based only on GNI per capita.

Source: Microfinance Information Exchange, Inc. (MIX).

September 2007

About the Authors
Thorsten Beck
Thorsten Beck is a Professor of Economics and Chairman
of the European Banking Center at Tilburg University.
Before joining the university in 2008, he worked at the
Development Research Group of the World Bank. His
research and policy work has focused on two main
questions: What is the effect of financial sector develop-
ment on economic growth and poverty alleviation? What
are the determinants of a sound and effective financial
sector? Recently, his research has focused on access to
financial services by small and medium-sized enterprises
and households. Professor Beck is co-author of Making
Finance Work for Africa and Finance for All? Policies and
Pitfalls in Expanding Access. His country experience in
both research and policy work includes Bangladesh,
Bolivia, Brazil, China, Colombia, Mexico, Peru, Russia, and
several sub-Saharan African countries. He is also a
Research Fellow in the Centre for Economic Policy
Research (CEPR) in London and a Fellow in the Center for
Financial Studies in Frankfurt. He studied at Tübingen
University, Universidad de Costa Rica, the University of
Kansas, and the University of Virginia.
James Bilodeau
James Bilodeau is an Associate Director and Head of
the Emerging Markets Finance Group at the World
Economic Forum USA. He joined the Forum following 10
years of management consulting and research experience,
primarily in the areas of financial services and information
technology. Immediately prior to joining the Forum, Mr.
Bilodeau independently led syndicated research projects
for cohorts of Global 2000 companies, ranging from an
analysis of the key drivers of effective information security
and risk management to a study benchmarking the per-
formance of retirement service providers. While working
at the Corporate Executive Board in Washington, DC, he
led research initiatives on topics such as the provision of
financial services to lower-income consumers and emerg-
ing enterprise applications for wireless technology. Mr.
Bilodeau also worked as a strategy consultant with Arthur
D. Little, Inc. He has an MBA with concentrations in
Finance and Strategic Management from the University
of Chicago and a BA (honors) in East Asian Studies from
Brown University. He completed a fellowship at Keio
University in Tokyo, Japan, as the recipient of the
Monbusho Japan Studies Scholarship.
About the Authors
Lawrence Chuang
Lawrence Chuang is an Associate with the Financial
Institutions Team at the World Economic Forum. Mr.
Chuang holds a BBA in Finance and Accounting from the
Stephen M. Ross School of Business at the University of
Michigan. In May 2011, he expects to complete his Master
of Business Administration degree, with a concentration
in Finance and Strategy, at the Yale School of Management.
Prior to his graduate studies, Mr. Chuang worked within
the Financial Institutions Group at BlackRock.
Howard Davies
Howard Davies is Director of the London School of
Economics and Political Science. Prior to his current
appointment he was Chairman of the Financial Services
Authority, the United Kingdom’s single financial regulator
since 1998. Howard Davies had previously served for two
years as Deputy Governor of the Bank of England, after
three years as Director General of the Confederation of
British Industry. From 1987 to 1992 he was Controller of
379
the Audit Commission. From 1982 to 1987 he worked for
McKinsey & Company in London, and during 1985–86
was seconded to the Treasury as Special Adviser to the
Chancellor of the Exchequer. He had previously worked at
the Treasury and the Foreign and Commonwealth Office,
including two years as Private Secretary to the British
Ambassador in Paris. He is a non-executive trustee of the
Tate Foundation and a member of the governing body,
Royal Academy of Music. In 2004 he was elected to an
honorary fellowship at Merton College and joined the
board of Morgan Stanley as a non-executive director. In
2009, he became an advisor to the Government
Investment Corporation of Singapore. His latest book, The
Financial Crisis: Who Is to Blame? was published in July
2010.
Michael Drexler
Michael Drexler is a Managing Director and Global Head
of Strategy, Commercial/Investment Banking and Wealth
Management at Barclays in London. His remit covers
business line reviews, business development, and the
facilitation of executive committee/board discussions and
acquisitions/disposals. Dr. Drexler also acts as a senior
advisor in Financial Services to the World Economic
Forum, and was elected a Young Global Leader by the
World Economic Forum in 2010. He previously held
positions in Principal Investments and Finance at Barclays
Capital. Dr. Drexler joined Barclays Capital in 2002 from
McKinsey & Company. Prior to that, he was an academic
researcher at Stanford. He holds a doctorate in
Mathematics from University of Oxford and an MSc in
Electronic Engineering from the Technical University,
Munich. An alumnus of Magdalen College, Oxford, he
actively supports his old college in its activities.
 About the Authors

Thierry Geiger
Thierry Geiger is Associate Director and Economist
within the Centre for Global Competitiveness and
Performance and an alumnus of the Global Leadership
Fellow Programme at the World Economic Forum. His
responsibilities include the development and computation
of a wide range of indexes as well as analysis for a
number of regional and topical projects. His main areas
of interest include econometrics, trade, and finance,
while his geographical focus is Asia. He is a co-author
of The Global Competitiveness Report, The Global
Information Technology Report, and The Global Enabling
Trade Report. He is also a contributor to The Financial
Development Report and co-editor of The Ukraine
Competitiveness Report series. A Swiss national, Mr.
Geiger holds a BA in Economics from the University of
Geneva with a specialization in Monetary and Financial
Economics, and an MA in Economics from the University
of British Columbia. Prior to joining the Forum, he worked
for the World Trade Organization and Caterpillar Inc. He
is also Co-Founder of Procab Studio SA, an IT company
based in Geneva.

Margareta Drzeniek Hanouz

Margareta Drzeniek Hanouz is Director and Senior
Economist with the Centre for Global Competitiveness
and Performance at the World Economic Forum,
where she researches and writes on issues of national
competitiveness, in particular related to the Arab world,
Eastern Europe, and international trade. She is lead
author or editor of a number of regional and topical
380 reports and papers, including The Global Enabling Trade
Report. Previously, she oversaw the economic modeling
for some of the Forum’s scenario projects and was
charged with developing the economics section of the
program for the World Economic Forum’s Annual
Meeting in Davos. Before joining the Centre for Global
Competitiveness and Performance, Dr. Drzeniek Hanouz
worked for several years with the International Trade
Centre in Geneva, where she was in charge of relations
with Central and Eastern European countries. Dr.
Drzeniek Hanouz received a Diploma in Economics
from the University of Münster and holds a PhD in
International Economics from the University of Bochum,
both in Germany.

Ibiye Harry
Ibiye Harry is a Project Manager with the Emerging
Markets Finance team at the World Economic Forum USA.
In addition to her work on The Financial Development
Report 2010, Ms. Harry has also contributed to the
Forum’s inaugural report on infrastructure investment,
Paving the Way: Maximizing the Value of Private
Investment in Infrastructure, and to ongoing work on
mobile financial services. Prior to joining the Forum, Ms.
Harry worked as an investment banking analyst at Credit
Suisse in New York. Ms. Harry holds a BS in Economics
with a concentration in Business and Public Policy from
The Wharton School, University of Pennsylvania.
 Partner Institutes
Partner Institutes

The World Economic Forum’s Centre for Global Canada

Competitiveness and Performance is pleased to
acknowledge and thank the following organizations
as its valued Partner Institutes, without which the
realization of The Financial Development Report 2010
Institute for Competitiveness and Prosperity
Tamer Azer, Researcher
Roger Martin, Chairman and Dean of the Rotman
School of Management, University of Toronto
James Milway, Executive Director

would not have been feasible: Chile

Universidad Adolfo Ibáñez
Argentina Fernando Larrain Aninat, Director of the Master in Management
IAE—Universidad Austral and Public Policy, School of Government
María Elina Gigaglia, Project Manager Camila Chadwick, Project Coordinator
Eduardo Luis Fracchia, Professor Leonidas Montes, Dean, School of Government
Australia China
Australian Industry Group Institute of Economic System and Management
Colleen Dowling, Senior Research Coordinator National Development and Reform Commission
Nick James, Economist Zhou Haichun, Deputy Director and Professor
Heather Ridout, Chief Executive Chen Wei, Research Fellow
Austria Dong Ying, Professor
Austrian Institute of Economic Research (WIFO) China Center for Economic Statistics Research,
Karl Aiginger, Director Tianjin University of Finance and Economics
Gerhard Schwarz, Coordinator, Survey Department Lu Dong, Professor 381
Jian Wang, Associate Professor
Bahrain
Hongye Xiao, Professor
Bahrain Competitiveness Council, Bahrain Economic
Bojuan Zhao, Professor
Development Board
Huazhang Zheng, Associate Professor
Nada Azmi, Manager, Economic Planning and Development
Jawad Habib, Senior Partner, BDO Jawad Habib Colombia
Rima Al Kilani, Director, International Marketing National Planning Department
Alvaro Edgar Balcazar, Entrepreneurial Development Director
Bangladesh
Carolina Rentería Rodríguez, General Director
Centre for Policy Dialogue (CPD)
Mauricio Torres Velásquez, Advisor
Khondaker Golam Moazzem, Senior Research Fellow
Kazi Mahmudur Rahman, Senior Research Associate Colombian Council of Competitiveness
Mustafizur Rahman, Executive Director Hernando José Gomez, President

Belgium Czech Republic

Vlerick Leuven Gent Management School CMC Graduate School of Business
Priscilla Boairdi, Associate, Competence Centre Tomas Janca, Executive Director
Entrepreneurship, Governance and Strategy
Denmark
Wim Moesen, Professor
Department of Business Studies, Aalborg University
Leo Sleuwaegen, Professor, Competence Centre Entrepreneurship,
Birgitte Gregersen, Associate Professor
Governance and Strategy
Gert Villumsen, Associate Professor
Brazil
Egypt
Fundação Dom Cabral
The Egyptian Center for Economic Studies
Marina Araújo, Economist and Researcher,
Omneia Helmy, Deputy Director of Research and
The Competitiveness and Innovation Center
Lead Economist
Carlos Arruda, Executive Director, International Board and Professor
Magda Kandil, Executive Director and Director of Research
and Coordinator, The Competitiveness
Malak Reda, Senior Economist
and Innovation Center
Arthur Kux, Economist and Research Assistant, Finland
The Competitiveness and Innovation Center ETLA—The Research Institute of the Finnish Economy
Movimento Brasil Competitivo (MBC) Petri Rouvinen, Research Director
Erik Camarano, Director President Pasi Sorjonen, Head of the Forecasting Group
Cecília Macedo, Economist and Senior Projects Coordinator Pekka Ylä-Anttila, Managing Director
Nikelma Moura, Communications Assistant France
HEC School of Management, Paris
Bertrand Moingeon, Professor and Deputy Dean
Bernard Ramanantsoa, Professor and Dean
 Partner Institutes
Germany
WHU—Otto Beisheim School of Management, Vallendar
Ralf Fendel, Professor of Monetary Economics
Michael Frenkel, Professor, Chair of Macroeconomics
and International Economics
Hong Kong SAR
Hong Kong General Chamber of Commerce
David O’Rear, Chief Economist
Federation of Hong Kong Industries
Alexandra Poon, Director
The Chinese General Chamber of Commerce
Hungary
KOPINT-TÁRKI Economic Research Ltd.
Ágnes Nagy, Project Manager
Éva Palócz, Chief Executive Officer
India
Confederation of Indian Industry (CII)
Chandrajit Banerjee, Director General
Tarun Das, Chief Mentor
Virendra Gupta, Head, International and Trade Fairs
Indonesia
Center for Industry, SME & Business
Competition Studies, University of Trisakti
Tulus Tambunan, Professor and Director
Ireland
Competitiveness Survey Group, Department of Economics,
University College Cork
Eleanor Doyle, Professor, Department of Economics
Niall O’Sullivan
Bernadette Power
382 National Competitiveness Council
Adrian Devitt, Manager
Caoimhe Gavin, Policy Advisor
Israel
Manufacturers’ Association of Israel (MAI)
Shraga Brosh, President
Dan Catarivas, Director
Yehuda Segev, Managing Director
Italy
SDA Bocconi School of Management
Secchi Carlo, Full Professor of Economic Policy,
Bocconi University
Paola Dubini, Associate Professor, Bocconi University
Francesco A. Saviozzi, SDA Assistant Professor,
Strategic and Entrepreneurial Management Department
Japan
Hitotsubashi University, Graduate School of International
Corporate Strategy (ICS) in cooperation with Keizai
Doyukai Keizai (Japan Association of Corporate Executives)
Yoko Ishikura, Professor
Kiyohiko Ito, Managing Director, Keizai Doyukai
Jordan
Ministry of Planning & International Cooperation
Jordan National Competitiveness Team
Hiba Abu Taleb, Primary Researcher
Maher Al Mahrouq, Team Leader and Director of Policies
and Studies Department
Kawther Al-Zou’bi, Primary Researcher
Kazakhstan
JSC “National Analytical Centre of the Government and
the National Bank of the Republic of Kazakhstan”
Ayana Manasova, Chairperson
Aibek Baisakalov, Project Manager
Korea, Republic of
College of Business School, Korea Advanced Institute of
Science and Technology KAIST
Ingoo Han, Senior Associate Dean and Professor
Ravi Kumar, Dean and Professor
Youjin Sung, Manager, Exchange Programme
Kuwait
Kuwait National Competitiveness Committee
Adel Al-Husainan, Committee Member
Fahed Al-Rashed, Committee Chairman
Sayer Al-Sayer, Committee Member
Malaysia
Institute of Strategic and International Studies (ISIS)
Mahani Zainal Abidin, Chief Executive
Steven C.M. Wong, Senior Director, Economics
Malaysia Productivity Corporation (MPC)
Mohd Razali Hussain, Director General
Lee Saw Hoon, Senior Director
Mexico
Center for Intellectual Capital and Competitiveness
Erika Ruiz Manzur, Executive Director
René Villarreal Arrambide, President and
Chief Executive Officer
Jesús Zurita González, General Director
Instituto Mexicano para la Competitividad (IMCO)
Gabriela Alarcón Esteva, Economist
Luis César Castañeda Valdés, Researcher
Manuel J. Molano Ruíz, Deputy General Director
Roberto Newell García, General Director
Ministry of the Economy
Paulo Esteban Alcaraz, Research Director, ProMéxico
Trade & Investment
Felipe Duarte Olvera, Undersecretary for Competitiveness
and Standardization
Javier Prieto, Technical Secretary for Competitiveness
Jose Antonio Torre, Head of the Business Intelligence Unit,
ProMéxico Trade & Investment
Morocco
Université Hassan II, LASAARE
Fouzi Mourji, Professor of Economics
Netherlands
Erasmus Strategic Renewal Center,
Erasmus University Rotterdam
Frans A. J. Van den Bosch, Professor
Henk W. Volberda, Professor
Nigeria
Nigerian Economic Summit Group (NESG)
Frank Nweke Jr., Director General
Sam Ohuabunwa, Chairman
Chris Okpoko, Research Director, Research
Norway
BI Norwegian School of Management
Eskil Goldeng, Researcher
Torger Reve, Professor
Pakistan
Competitiveness Support Fund
Arthur Bayhan, Chief Executive Officer
Imran Naeem Ahmad, Communication Specialist
Maryam Jawaid, Communication Specialist
Panama
INCAE Business School, Latin American Center for
Competitiveness and Sustainable Development (CLACDS)
Arturo Condo, Rector
Marlene de Estrella, Director of External Relations
Lawrence Pratt, Director, CLACDS
Víctor Umaña, Researcher and Project Manager, CLACDS
 Partner Institutes
Peru Thailand
Centro de Desarrollo Industrial (CDI), Sociedad Nacional Sasin Graduate Institute of Business Administration,
de Industrias Chulalongkorn University
Néstor Asto, Project Director Pongsak Hoontrakul, Senior Research Fellow
Luis Tenorio, Executive Director Toemsakdi Krishnamra, Director of Sasin
Piyachart Phiromswad, Faculty of Economics
Philippines
Makati Business Club (MBC) in association with Thailand Development Research Institute (TDRI)
Management Association of the Philippines (MAP) Somchai Jitsuchon, Research Director
Alberto A. Lim, Executive Director, MBC Chalongphob Sussangkarn, Distinguished Fellow
Arnold P. Salvador, Executive Director, MAP Yos Vajragupta, Senior Researcher
Marc P. Opulencia, Deputy Director, MBC
Turkey
Michael B. Mundo, Chief Economist, MBC
TUSIAD Sabanci University Competitiveness Forum
Poland Dilek Cetindamar, Director and Professor
Economic Institute, National Bank of Poland Funda Kalemci, Project Specialist
Mateusz Pipien, General Director
Ukraine
Piotr Boguszewski, Advisor
CASE Ukraine, Center for Social and Economic Research
Romania Dmytro Boyarchuk, Executive Director
Group of Applied Economics (GEA) Vladimir Dubrovskiy, Leading Economist
Liviu Voinea, Executive Director
United Arab Emirates
Irina Zgreaban, Program Coordinator
Dubai Economic Council
Russian Federation Gayane Afrikian, Director, Dubai Competitiveness Centre
Bauman Innovation Khawla Belqazi, Special Projects Manager
Alexei Prazdnitchnykh, Principal, Associate Professor Emirates Competitiveness Council
Katerina Marandi, Consultant Abdullah Nasser Lootah,Secretary General
Stockholm School of Economics, Russia Institute for Social and Economic Research (ISER),
Igor Dukeov, Area Principal Zayed University
Carl F. Fey, Associate Dean of Research Nico Vellinga, Professor
Saudi Arabia United Kingdom
National Competitiveness Center (NCC) LSE Enterprise Ltd, London School of Economics and Political
Awwad Al-Awwad, President Science
Khaldon Mahasen, Vice President Niccolo Durazzi, Project Administrator 383
Robyn Klingler Vidra, Researcher
Singapore
Jane Lac, Project Manager
Economic Development Board
Lim Hong Khiang, Director Planning 2 Venezuela
Chua Kia Chee, Head, Research and Statistics Unit CONAPRI—Venezuelan Council for Investment Promotion
Cheng Wai San, Head, Planning Eduardo Porcarelli, Executive Director
Litsay Guerrero, Manager, Economic Affairs
Slovak Republic
Business Alliance of Slovakia (PAS) Vietnam
Robert Kicina, Executive Director Central Institute for Economic Management (CIEM)
Peter Klatik, Researcher Dinh Van An, President
Matej Tunega, Researcher Phan Thanh Ha, Deputy Director, Department of
Macroeconomic Management
South Africa
Pham Hoang Ha, Senior Researcher, Department of
Business Leadership South Africa
Macroeconomic Management
Friede Dowie, Director
Michael Spicer, Chief Executive Officer Institute for Development Studies in HCMC (HIDS)
Nguyen Trong Hoa, Professor and President
Business Unity South Africa
Du Phuoc Tan, Head of Department
Simi Siwisa, Director
Trieu Thanh Son, Researcher
Jerry Vilakazi, Chief Executive Officer

Spain
IESE Business School, International Center for Competitiveness
Antoni Subirà, Professor
María Luisa Blázquez, Research Associate

Sweden
Center for Strategy and Competitiveness,
Stockholm School of Economics
Christian Ketels, Senior Research Fellow
Örjan Sölvell, Professor

Switzerland
University of St. Gallen, Executive School of Management,
Technology and Law (ES-HSG)
Beat Bechtold, Communications Manager
Alexander Jungmeister, Vice Executive Director
Rubén Rodriguez Startz, Project Manager
The importance of financial systems to economic growth has become even more
pronounced in recent years, yet there is still surprisingly little agreement about how to
define and measure their development. To address this gap, the World Economic Forum
has undertaken an ongoing initiative that aims to provide business leaders and policy-
makers with a common framework for identifying and discussing the key factors in the
development of global financial systems and markets.

The Financial Development Report 2010, in its third edition, measures and analyzes
the factors enabling the development of financial systems in 57 economies. The Report
aims to provide a comprehensive means for countries to benchmark the various aspects
of their financial systems and establish priorities for improvement. It is published
annually so that countries can continue to benchmark themselves and track their
progress over time.

The Report presents the rankings of the third Financial Development Index (FDI),
developed by the World Economic Forum in collaboration with the academic community,
multilateral organizations, and business leaders. It assembles a vast amount of data
to create a holistic assessment of the different aspects of complex financial systems
including the institutional environment, the business environment, financial stability,
banks, capital markets, and overall capital availability and access. Essay contributions
elaborate on the availability of financing to small- and medium-sized enterprises and the
impact of capital flows on financial development. The Report contains detailed profiles
for the 57 economies covered by the FDI this year; Morocco and Romania are two new
additions to the Index. Data used in the calculation of the FDI are fully annotated and
clearly presented.

Written in a nontechnical language and style, the Report appeals to a large audience
made up of policymakers, business leaders, academics, and different organizations of
civil society. It aims to provide policymakers with a balanced perspective as to which
aspects of their country’s financial system are most important and with the ability to
empirically calibrate this view relative to other countries.

ISBN-13: 978-92-95044-93-7