The World Economic Forum has just published “The Financial Development Report 2012.” The study ranks 62 of the world’s leading financial systems and capital markets, analyzing the drivers of financial system development in advanced and emerging economies to serve as a tool for countries to benchmark themselves and establish priorities for reform. The rankings are based on over 120 variables spanning institutional and business environments, financial stability, and size and depth of capital markets, among other factors.
The Report includes contributions from scholars on critical issues such as the regulation of the traditional and shadow banking systems in light of the financial crisis of 2007-2009, as well as the rise of emerging market banks, their importance as foreign investors and how the global financial crisis has allowed these banks to increase their footprint at the regional level. The study does not attempt to inform current or short-term events, such as the latest developments affecting the eurozone. Rather, it aims to serve decision-makers in developing a balanced perspective as to which aspects of their country’s financial system are most important in the long term and empirically calibrate this view relative to other countries.
An important finding of this year’s Index results is that financial systems across the world appear to have stalled. One can observe this in the minimal movement across ranks among the top 10 economies. This is in line with the fact that the aggregate Index experienced less year-over-year rank movements than at any time since this Report was first published in 2008.
Access the full report here.