The Financial Development Report 2012

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 welldefined, geographically selfcontained economic areas that may not be states but for which statistical data are maintained on a separate and independent basis. World Economic Forum USA Inc. Copyright © 2012 by the World Economic Forum USA Inc. All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise without the prior permission of the World Economic Forum. ISBN10: 9295044398 ISBN13: 9789295044395 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. A catalogue record for this book is available from the Library of Congress

Insight Report The Financial Development Report 2012 World Economic Forum Geneva, Switzerland The Financial Development Report 2012 World Economic Forum USA Inc New York, USA The terms country and nation, as used in this Report, World Economic Forum USA Inc not in all cases refer to a territorial entity that is a state as understood by international law and practice The terms Copyright © 2012 cover well-defined, geographically self-contained economic by the World Economic Forum USA Inc areas that may not be states but for which statistical data are maintained on a separate and independent basis All rights reserved No reproduction, copy or transmission of this publication may be made without written permission No paragraph of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise without the prior permission of the World Economic Forum ISBN-10: 92-95044-39-8 ISBN-13: 978-92-95044-39-5 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources A catalogue record for this book is available from the British Library A catalogue record for this book is available from the Library of Congress Contents Contributors Academic Advisors v vii Part 2: Country/Economy Profiles 55 How to Read the Country/Economy Profiles 57 List of Countries/Economies 59 Preface ix Country/Economy Profiles 60 xi Part 3: Data Tables by Klaus Schwab Foreword 309 by Kevin Steinberg and Giancarlo Bruno How to Read the Data Tables 311 Executive Summary xiii Index of Data Tables 313 Data Tables .315 Part 1: Findings from the Financial Technical Notes and Sources 385 About the Authors 399 Partner Institutes 401 Development Index 2012 1.1: The Financial Development Index 2012: Stalled Recovery—In Search of Growth by Isabella Reuttner and Todd Glass Appendix A: Structure of the Financial 36 Development Index 2012 1.2: Drawing Boundaries Around and 39 Through the Banking System by Darrell Duffie 1.3: Branching Out: The Rise of Emerging 47 Market Banks by Neeltje van Horen The Financial Development Report 2012 | iii Contributors EDITOR EXPERT COMMITTEE* Isabella Reuttner, Associate Director, World Economic Forum Giancarlo Bruno, Senior Director, World Economic Forum USA PROJECT TEAM Todd Glass, Project Associate, World Economic Forum USA Chris Coles, Partner, Actis Michael Drexler, Senior Director, PROJECT ADVISORS World Economic Forum USA Margareta Drzeniek Hanouz, Director, Senior Economist, Patrice Etlin, Managing Partner, Advent International World Economic Forum Thierry Geiger, Associate Director, Economist, World Economic Forum Michael Koenitzer, Associate Director, Head of Project Management, World Economic Forum USA CONTRIBUTORS Reto Kohler, Head of Strategy, Corporate and Investment Banking and Wealth Management, Barclays Gerard Lyons, Chief Economist and Group Head of Global Research, Standard Chartered Raghuram Rajan, Eric J Gleacher Distinguished Service Professor of Finance, The University of Chicago Booth School Darrell Duffie, Dean Witter Distinguished Professor of of Business Finance, Stanford Graduate School of Business Nouriel Roubini, Professor of Economics and International Neeltje van Horen, Senior Economist, Business, Leonard N Stern School of Business, New York De Nederlandsche Bank University and Chairman, Roubini Global Economics Kevin Steinberg, Chief Operating Officer, World Economic Forum USA Augusto de la Torre, Chief Economist for Latin America and the Caribbean, World Bank Ksenia Yudaeva, Director of the Macroeconomic Research Center, Sberbank We thank Gilly Nadel for her superb editing work and Tim Bruce and Lowercase, Inc for their excellent graphic design and layout We would also like to thank Chris Ryan, Boripat Louichareon, Martin Cihak, and Zbyszko Tabernacki for their assistance in assembling data for this Report We would like to thank Dealogic, the IHS World Industry Service team, and Thomson Reuters for their generous contribution of data for this Report * 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 not reflect the opinions of the Expert Committee members The Financial Development Report 2012 | v Contributors FROM THE WORLD ECONOMIC FORUM Kevin Steinberg, Chief Operating Officer, World Economic The Global Benchmarking Network Forum USA† Jennifer Blanke, Senior Director, Lead Economist, Head Giancarlo Bruno, Senior Director, Head of Financial of The Global Benchmarking Network Margareta Drzeniek Hanouz, Director, Senior Services Industry† Michael Drexler, Senior Director, Head of Investors Economist, Head of Competitiveness Research Beñat Bilbao-Osorio, Associate Director, Senior Economist Industry† Matthew Blake, Associate Director, Head of Banking and Capital Markets † Michael Koenitzer, Associate Director, Head of Project Management† Abel Lee, Associate Director, Head of Insurance and Ciara Browne, Associate Director Thierry Geiger, Associate Director, Economist Roberto Crotti, Quantitative Economist Tania Gutknecht, Community Manager Asset Management† Caroline Ko, Junior Economist Maha Eltobgy, Associate Director, Head of Cecilia Serin, Team Coordinator Private Investors † Irwin Mendelssohn, Associate Director† Abigail Noble, Associate Director† Isabella Reuttner, Associate Director Andre Belelieu, Senior Community Manager† Lisa Donegan, Senior Community Manager† Nadia Guillot, Senior Community Manager Tik Keung, Project Manager† Elisabeth Bremer, Senior Community Associate† Amy Cassidy, Senior Team Coordinator† Alexandra Hawes, Senior Team Coordinator† Todd Glass, Project Associate† Peter Gratzke, Project Associate† Megan O’Neill, Team Coordinator† Dena Stivella, Team Coordinator† † Employees of the World Economic Forum USA vi | The Financial Development Report 2012 Academic Advisors Thorsten Beck Tilburg University Erik Feyen The World Bank Leora Klapper The World Bank Luc Laeven International Monetary Fund Maria Soledad Martinez Peria The World Bank Sergio Schmukler The World Bank Laura Tyson University of California, Berkeley Luigi Zingales University of Chicago 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 not reflect the opinions of the Academic Advisors The Financial Development Report 2012 | vii Technical Notes and Sources securities as of the date of the most current financial Source: Swiss Re, World Insurance in 2011: information prior to the announcement of the transaction Non-life Ready to Take Off, 2012 Preferred equity is not included if the cost to acquire preferred shares (CSTPFD) is filled in 5.10 Life insurance density This is the ratio of direct domestic premiums for life Source: M&A transaction value data from Dealogic insurance to per capita GDP | 2011 Analytics (data retrieved July 2012); GDP data from Only premium income from domestic risks is used IMF, World Economic Outlook Database, April 2012 to calculate insurance penetration and density Cross-border business is not included 5.06 Share of total number of M&A deals This is the three-year average of the percent of world Source: Swiss Re, World Insurance in 2011: Non-life mergers and acquisitions (M&A) deals occurring in a Ready to Take Off, 2012; GDP per capita data from given country, as measured by the share of the total IMF, World Economic Outlook Database, April 2012 number of global M&A deals | 2009–2011 This variable counts the number of M&A transactions 5.11 Non-life insurance density as defined in the M&A transaction value to GDP This is the ratio of direct domestic premiums for variable and shows the percent of the total global non-life insurance to per capita GDP | 2011 M&A deals attributable to that country Share Only premium income from domestic risks is used calculation is based on M&A deals in the 62 to calculate insurance penetration and density economies included in the Index Cross-border business is not included Source: Dealogic Analytics (data retrieved July 2012) Source: Swiss Re, World Insurance in 2011: Non-life Ready to Take Off, 2012; GDP per capita data from 5.07 Life insurance penetration IMF, World Economic Outlook Database, April 2012 This variable is the ratio of direct life insurance premiums from domestic sources to GDP | 2011 5.12 Relative value added of insurance to GDP   Only premium income from domestic risks is used to This is the value added by insurance and pension calculate insurance penetration and density services to the economy, after costs are subtracted, Cross-border business is not included as a percent of GDP | 2011 This indicator represents what remains of total sales Source: Swiss Re, World Insurance in 2011: Non-life revenue after the costs of providing insurance and Ready to Take Off, 2012; GDP data from IMF, World pension products are taken out, signifying the value Economic Outlook Database, April 2012 that the insurance and pension sector creates in the economy Figures are preliminary and subject 5.08 Non-life insurance penetration to change This variable is the ratio of direct non-life insurance premiums from domestic sources to GDP | 2011 Source: IHS, World Industry Services (data retrieved Only premium income from domestic risks is used August 2012); GDP data from IMF, World Economic to calculate insurance penetration and density Outlook Database, April 2012 Cross-border business is not included 5.13 Securitization to GDP   Source: Swiss Re, World Insurance in 2011: Non-life This is the three-year average of the sum of Ready to Take Off, 2012; GDP data from IMF, World asset-backed securities (ABS), mortgage-backed Economic Outlook Database, April 2012 securities (MBS), high-yield bonds, and highly leveraged loans’ deal value as a percent of 5.09 Real growth of direct insurance premiums GDP | 2009–2011 This is the annual real rate of growth, in percent, of This figure is calculated based on a three-year average direct premiums (life and non-life) based on local of securitization deals and GDP currency prices | 2011 Real growth rates are calculated using premiums in Source: Dealogic Analytics (data retrieved July 2012); local currencies and adjusted for inflation using the GDP data from IMF, World Economic Outlook consumer price index for each country Database, April 2012 394 | The Financial Development Report 2012 Technical Notes and Sources 5.14 Share of total number of securitization deals This is the three-year average of the sum of 6.04 Interest rate derivatives turnover: Forward rate agreements asset-backed securities (ABS), mortgage-backed This is the percent share of world total of securities (MBS), high-yield bonds, and highly over-the-counter single-currency forward interest leveraged loans deals as a percent of total deals rate agreements turnover | 2010 | 2009–2011 Transactions are measured in US dollars and involve This figure is calculated based on a three-year interest rate forward contracts in which the rate to average of securitization deals 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 Percents are based Source: Dealogic Analytics (data retrieved July 2012) on the 62 economies included in the Index 6.01 Spot foreign exchange turnover  This is the percent share of the world total of spot Source: Bank for International Settlements, Triennial foreign exchange turnover | 2010 Central Bank Survey, December 2010 Transactions are measured in US dollars and involve the exchange of two currencies at a rate agreed upon 6.05 Interest rate derivatives turnover: Swaps on the date of the contract for value or delivery (cash This is the percent share of the world total of settlement) within two business days Percents are over-the-counter single-currency interest rate swaps based on the 62 economies included in the Index turnover | 2010 Transactions are measured in US dollars and involve Source: Bank for International Settlements, Triennial agreements to exchange periodic payments related to Central Bank Survey, December 2010 interest rates on a single currency; these can be fixed for floating, or floating for floating based on different 6.02 Outright forward foreign exchange turnover  indices This group includes those swaps whose This is the percent share of the world total of outright notional principal is amortized according to a fixed forward foreign exchange turnover | 2010 schedule independent of interest rates Percents are Transactions are measured in US dollars and involve based on the 62 economies included in the Index the exchange of two currencies at a rate agreed on the date of the contract for value or delivery (cash Source: Bank for International Settlements, Triennial settlement) at some time in the future (more than two Central Bank Survey, December 2010 business days later) This category also includes non-deliverable forwards and other forward contracts 6.06 Interest rate derivatives turnover: Options for differences Percents are based on the 62 economies This is the percent share of the world total of included in the Index over-the-counter interest rate options turnover | 2010 Transactions are measured in US dollars and involve Source: Bank for International Settlements, Triennial option contracts that give the right to pay or receive Central Bank Survey, December 2010 a specific interest rate on a predetermined principal for a set period of time Percents are based on the 6.03 Foreign exchange swap turnover   62 economies included in the Index This is the percent share of the world total of foreign exchange swap turnover | 2010 Source: Bank for International Settlements, Triennial Transactions are measured in US dollars and involve Central Bank Survey, December 2010 the actual exchange of two currencies (principal amount only) on a specific date at a rate agreed at the 6.07 Foreign exchange derivatives turnover: time of the conclusion of the contract (the short leg), Currency swaps and a reverse exchange of the same two currencies at This is the percent share of the world total of a date further in the future at a rate (generally different over-the-counter foreign exchange currency swaps from the rate applied to the short leg) agreed at the turnover | 2010 time of the contract (the long leg) Percents are based Transactions are measured in US dollars and involve on the 62 economies included in the Index contracts that commit two counterparties to exchange streams of interest payments in different currencies for Source: Bank for International Settlements, Triennial an agreed period of time and to exchange principal Central Bank Survey, December 2010 amounts in different currencies at a pre-agreed The Financial Development Report 2012 | 395 Technical Notes and Sources exchange rate at maturity Percents are based on the 6.11 Stock market value traded to GDP This is the total value of shares traded on stock 62 economies included in the Index market exchanges as a percent of GDP | 2010 Source: Bank for International Settlements, Triennial Value of shares traded and GDP are measured over Central Bank Survey, December 2010 the same time period 6.08 Foreign exchange derivatives turnover: Options Source: World Bank, Global Financial Development Database, September 2012 This is the percent share of the world total of over-the-counter foreign exchange options 6.12 Number of listed companies per 10,000 people turnover | 2010 Transactions are measured in US dollars and involve This is the number of publicly listed companies per contracts that give the right to buy or sell a currency 10,000 people | 2010 with another currency at a specified exchange rate Number of publicly listed companies per capita This during a specified period This category also includes indicator does not include investment companies, exotic foreign exchange options, such as average rate mutual funds, or other collective investment vehicles options and barrier options Percents are based on Source: World Bank, Global Financial Development the 62 economies included in the Index [ ] Database, September 2012 Ft for International Ft–1 Source: Bank Settlements, Triennial + (0.5) x P_et P_et–1 Central Bank Survey, December 2010 , GDPt 6.09 6.13 Private domestic bond market capitalization to GDP P_aturnover Stock market ratio t This variable is the domestic debt securities issued This is the ratio of the value of total shares traded to by financial institutions and corporations as a share of average real market capitalization | 2010 GDP | 2011 The denominator is calculated using the following This ratio is calculated using the following deflation deflation method: method: Tt P_at (0.5) x [ Mt P_et + Mt–1 P_et–1 ] (0.5) x , [ Ft P_et + Ft–1 P_et–1 ] , GDPt P_at where T is total value traded, M is stock market where F is amount outstanding of private domestic capitalization, P_e is end-of period CPI, and P_a debt securities, P_e is end-of period CPI, and P_a is is average annual CPI average annual CPI Source: World Bank, Global Financial Development Source: Bank for Tt International Settlements, BIS Database, September 2012 P_at June 2012; GDP data from IMF, Quarterly Review, [ ] , World Economic Mt Outlook Mt–1 Database, April 2012; (0.5) x 6.10 Stock market capitalization to GDP + P_eInternational P_e inflation data from IMF, Financial Statistics t–1 t (data retrieved August 2012) This indicator is the value of listed shares as a percent of GDP | 2010 The ratio is calculated using the following deflation 6.14 Public domestic bond market capitalization method: (0.5) x [ Ft + P_et Ft–1 P_et–1 ] to GDP This variable is the domestic debt securities issued by the government as a share of GDP | 2011 , GDPt This ratio is calculated using the following deflation method: P_at where F is stock market capitalization, P_e is end-of period CPI, and P_a is average annual CPI (0.5) x [ Ft P_et + Ft–1 P_et–1 ] , GDPt Source: World Bank, Global Financial Development Tt Database, September 2012 P_at [ Mt + Mt–1 ] where F is amount outstanding of public domestic , (0.5) x Development Report 2012 396 | The Financial P_e P_e t t–1 P_at Technical Notes and Sources debt securities, P_e is end-of period CPI, and P_a is 6.17 Local currency corporate bond issuance to GDP This is investment-grade and high-yield issuance average annual CPI corporate bonds as a share of GDP | 2011 Source: Bank for International Settlements, BIS Corporate bonds consist of industrial and utility Quarterly Review, June 2012; GDP data from IMF, businesses; this variable excludes all financial firms World Economic Outlook Database, April 2012; inflation data from IMF, International Financial Statistics Source: Dealogic Analytics (data retrieved July 2012); (data retrieved August 2012) GDP data from IMF, World Economic Outlook Database, April 2012 6.15 Private international bonds to GDP This variable is the international debt securities issued 7.06 Foreign direct investment to GDP by financial institutions and corporations as a share of This variable is comprised of equity capital, reinvested GDP | 2011 earnings, and intra-company loans | 2011 The ratio is calculated using the following deflation Equity capital is the foreign direct investor’s purchase method: of shares of an enterprise in a country other than that (0.5) x [ Ft Ft–1 + P_et P_et–1 where the investor resides Reinvested earnings are ] comprised of the foreign direct investor’s share (in , GDPt proportion to direct equity participation) of earnings not distributed as dividends by affiliates or earnings P_at not remitted to the foreign direct investor Such where F is amount outstanding of private international retained profits by affiliates are reinvested debt securities, P_e is end-of period CPI, and P_a is Intra-company loans or intra-company debt transactions average annual CPI refer to short- or long-term borrowing and lending of funds between foreign direct investors (parent Tt International Settlements, BIS Source: Bank for enterprises) and affiliate enterprises P_atJune 2012; GDP data from IMF, Quarterly Review, , World Economic Mt Outlook Mt–1Database, April 2012; + (0.5) x P_eInternational t–1 t IMF, inflation dataP_e from Financial Statistics Source: United Nations Conference on Trade and (data retrieved August 2012) Investment Flows, Annual, 1970–2011”; GDP data [ ] Development, “Inward and Outward Foreign Direct from IMF, World Economic Outlook Database, 6.16 Public international bonds to GDP April 2012 This variable is the international debt securities issued by the government as a share of GDP | 2011 7.07 Market penetration of bank accounts The ratio is calculated using the following deflation This is the percent of the population (15 years method: or older) with an account at a formal financial (0.5) x [ Ft P_et + Ft–1 P_et–1 ] institution | 2011 These data are collected as part of a survey of financial , GDPt inclusion administered by the World Bank More than 150,000 nationally represented and randomly P_at selected adults age 15 and above were interviewed where F is amount outstanding of public international Responses were received from 148 economies during debt securities, P_e is end-of period CPI, and P_a is the 2011 calendar year average annual CPI Source: Demirguc-Kunt, A and L Klapper 2012 Source: Bank for Tt International Settlements, BIS “Measuring Financial Inclusion: The Global Findex P_at June 2012; GDP data from IMF, Quarterly Review, , World Economic Mt Outlook Mt–1 Database, April 2012; + (0.5) x P_eInternational P_e inflation data from IMF, Financial Statistics t–1 t Database.” World Bank Policy Research Working [ ] Paper 6025 Washington DC: The World Bank (data retrieved August 2012) The Financial Development Report 2012 | 397 7.08 Commercial bank branches 7.12 Loan from a financial institution This is the number of commercial bank branches This is the percent of respondents who have per 100,000 adults | 2010 borrowed from a financial institution in the past These data are collected as part of an access to year | 2011 finance survey administered by the IMF in 2011 These data are collected as part of a survey of Responses were received from approximately financial inclusion administered by the World Bank 140 countries More than 150,000 nationally represented and randomly selected adults age 15 and above were Source: IMF, Financial Access Survey, 2011 interviewed Responses were received from 148 economies during the 2011 calendar year 7.09 Total number of ATMs This is the total number of ATMs per 100,000 Source: Demirguc-Kunt, A and L Klapper 2012 adults | 2010 “Measuring Financial Inclusion: The Global Findex These data are collected as part of an access to Database.” World Bank Policy Research Working finance survey administered by the IMF in 2011 Paper 6025 Washington DC: The World Bank Responses were received from approximately 140 countries Source: IMF, Financial Access Survey, 2011 7.10 Debit card penetration This is the percent of respondents with a debit card | 2011 These data are collected as part of a survey of financial inclusion administered by the World Bank More than 150,000 nationally represented and randomly selected adults age 15 and above were interviewed Responses were received from 148 economies during the 2011 calendar year Source: Demirguc-Kunt, A and L Klapper 2012 “Measuring Financial Inclusion: The Global Findex Database.” World Bank Policy Research Working Paper 6025 Washington DC: The World Bank 7.11 Loan accounts at MFIs This variable indicates the total number of active borrowers from microfinance institutions (MFIs) per 1,000 adults | 2011 The total number of people registered as active borrowers at an MFI divided by the total population Source: Microfinance Information Exchange, Inc (MIX) (data retrieved August 2012) 398 | The Financial Development Report 2012 About the Authors Michael Drexler Darrell Duffie Michael Drexler is a New York-based Senior Director at the Darrell Duffie is the Dean Witter Distinguished Professor of World Economic Forum, where he overlooks the Investors Finance at Stanford University’s Graduate School of Business community He joined the Forum after nine years at Barclays, He is a member of the Financial Advisory Roundtable of the where he most recently was Managing Director and Global Federal Reserve Bank of New York, a Fellow and member Head of Strategy, Commercial/Investment Banking and of the Council of the Econometric Society, a Research Fellow Wealth Management At Barclays, he also held positions in of the National Bureau of Economic Research, a Fellow of Principal Investments and Finance, as well as Chief of Staff the American Academy of Arts and Sciences, and since 2008 to the chairman He joined Barclays Capital in 2002 from a member of the board of directors of Moody’s Corporation McKinsey & Company Prior to that, Drexler was an academic He serves on the editorial boards of several major academic researcher at Stanford He holds a doctorate in Mathematics journals Duffie was the President of the American Finance from University of Oxford, and an MSc in Electronic Association in 2009 His research and teaching focus on Engineering from the Technical University at Munich An valuation and risk in financial markets His most recent books alumnus of Magdalen College, Oxford, he actively supports are How Big Banks Fail—And What to Do About It (2010), his old college in its activities Measuring Corporate Default Risk (2011), and Dark Markets: Asset Pricing and Information Transmission in Margareta Drzeniek Hanouz Over-the-Counter Markets (2012) Margareta Drzeniek Hanouz is Head of Competitiveness Research and a Director and Senior Economist with Thierry Geiger The Global Benchmarking Network at the World Economic Thierry Geiger is an Economist and Associate Director with Forum, where she researches and writes on issues of national The Global Benchmarking Network at the World Economic competitiveness, especially those related to the Arab world, Forum He leads the competitiveness research on Asia, Eastern Europe, and international trade She is lead author or supervises the development and computation of a wide range editor of a number of regional and topical reports and papers, of composite indicators, and is responsible for the Network’s including The Global Enabling Trade Report Previously, she technical assistance and capacity-building activities oversaw the economic modeling for some of the Forum’s His areas of expertise are private-sector development, scenario projects and was charged with developing the international trade, and applied economics Mr Geiger is a economics section of the program for the World Economic co-author of the Forum’s flagship publications The Global Forum’s Annual Meeting in Davos Before joining the Forum, Competitiveness Report, The Global Information Technology Dr Drzeniek Hanouz worked for several years with the Report, and The Global Enabling Trade Report He is the International Trade Centre in Geneva, where she was in lead author of several regional and country studies A Swiss charge of relations with Central and Eastern European national, Mr Geiger holds a BA in Economics from the countries Dr Drzeniek Hanouz received a diploma in University of Geneva and an MA in Economics from the Economics from the University of Münster and holds a PhD University of British Columbia He was a Fellow of the Forum’s in International Economics from the University of Bochum, Global Leadership Programme Prior to joining the Forum, both in Germany he worked for the World Trade Organization and Caterpillar Inc He is co-founder of Procab Studio, a Geneva-based IT company The Financial Development Report 2012 | 399 About the Authors Todd Glass Neeltje van Horen Todd Glass is a Project Associate with the Emerging Markets Neeltje van Horen is a Senior Economist at the Research Finance team at the World Economic Forum USA In Department of De Nederlandsche Bank She has visited and addition to his work on The Financial Development Report, worked at the Federal Reserve Bank of Chicago Research Mr Glass contributed to Redefining the Emerging Market Department, EBRD Office of the Chief Economist, and the Opportunity: Driving Growth through Financial Services International Monetary Fund Research Department Prior Innovation Immediately prior to joining the Forum, he to joining the Central Bank, she worked as a Financial worked as a Financial Analyst at Houlihan Lokey, where Economist at the World Bank Her research focuses mainly he provided financial and economic analysis in both legal and on international finance and international financial markets non-litigation settings Prior to his work at Houlihan Lokey, and institutions She has published articles on foreign Mr Glass was a consultant at Fulcrum Inquiry, a financial banking, financial crises, contagion, and financial integration and economics consulting firm located in Los Angeles His role at Fulcrum involved calculating damages and assisting in the preparation of expert testimony in matters of dispute resolution Mr Glass graduated Phi Beta Kappa and summa cum laude with a BA in History and a BA in Political Science (concentration in International Relations) from the University of California, Los Angeles Isabella Reuttner Isabella Reuttner is an Associate Director in the World Economic Forum’s Financial Services team In addition to The Financial Development Report, her responsibilities include managing initiatives on current topics in which a multi-stakeholder approach could enhance dialogue by adding fresh thinking, thereby ultimately moving it forward The most recent such initiatives include projects on sustainable credit growth and financial innovation She joined the World Economic Forum after five years of investment banking experience Immediately prior to joining the Forum, Ms Reuttner worked in the Strategy & Planning team at Barclays Capital, where her role included managing projects for senior management and evaluating inorganic growth opportunities Prior to Barclays Capital, she worked in several areas, including consulting, pharmaceutical, and Internet companies Ms Reuttner holds a BA (honors) in International Business with Spanish with a major in Corporate Finance 400 | The Financial Development Report 2012 Partner Institutes The World Economic Forum’s Global Benchmarking Brazil Network is pleased to acknowledge and thank Fundaỗóo Dom Cabral, Bradesco Innovation Center the following organizations as its valued Partner Institutes, without which the realization of The Financial Development Report 2012 would Carlos Arruda, International Relations Director, Innovation and Competitiveness Professor Daniel Berger, Bachelor Student in Economics Fabiana Madsen, Economist and Associate Researcher not have been feasible: Movimento Brasil Competitivo (MBC) Argentina Carolina Aichinger, Project Coordinator IAE—Universidad Austral Erik Camarano, Chief Executive Officer Eduardo Luis Fracchia, Professor Santiago Novoa, Project Manager Canada The Conference Board of Canada Australia Michael R Bloom, Vice-President, Organizational Australian Industry Group Effectiveness & Learning Colleen Dowling, Senior Research Coordinator Douglas Watt, Associate Director Innes Willox, Chief Executive Chile Austria Universidad Adolfo Ibáñez Austrian Institute of Economic Research (WIFO) Fernando Larrain Aninat, Director MBA Karl Aiginger, Director Leonidas Montes, Dean, School of Government Gerhard Schwarz, Coordinator, Survey Department China Bahrain Institute of Economic System and Management, National Bahrain Economic Development Board Development and Reform Commission Kamal Bin Ahmed, Minister of Transportation and Acting Chen Wei, Research Fellow Chief Executive of the Economic Development Board Dong Ying, Professor Nada Azmi, Manager, Economic Planning and Development Zhou Haichun, Deputy Director and Professor Maryam Matter, Coordinator, Economic Planning and China Center for Economic Statistics Research, Tianjin Development University of Finance and Economics Bangladesh Bojuan Zhao, Professor Centre for Policy Dialogue (CPD) Fan Yang, Professor Jian Wang, Associate Professor Khondaker Golam Moazzem, Senior Research Fellow Hongye Xiao, Professor Kishore Kumer Basak, Research Associate Lu Dong, Professor Mustafizur Rahman, Executive Director Colombia Belgium National Planning Department Vlerick Business School Sara Patricia Rivera, Advisor Priscilla Boiardi, Associate, Competence Centre John Rodríguez, Coordinator, Competitiveness Observatory Entrepreneurship, Governance and Strategy Javier Villarreal, Enterprise Development Director Wim Moesen, Professor Leo Sleuwaegen, Professor, Competence Centre Colombian Private Council on Competitiveness Entrepreneurship, Governance and Strategy Rosario Córdoba, President Marco Llinás, Vice President The Financial Development Report 2012 | 401 Partner Institutes Czech Republic Hungary CMC Graduate School of Business KOPINT-TÁRKI Economic Research Ltd Tomas Janca, Executive Director Éva Palócz, Chief Executive Officer Peter Vakhal, Project Manager Denmark Danish Technological Institute, Center for Policy and Business India Development Confederation of Indian Industry (CII) Hanne Shapiro, Center Manager Chandrajit Banerjee, Director General Marut Sengupta, Deputy Director General Egypt Gantakolla Srivastava, Head, Financial Services The Egyptian Center for Economic Studies (ECES) Iman Al-Ayouty, Senior Economist Indonesia Omneia Helmy, Acting Executive Director and Director Center for Industry, SME & Business Competition Studies, of Research University of Trisakti Tulus Tambunan, Professor and Director Finland ETLA—The Research Institute of the Finnish Economy Ireland Markku Kotilainen, Research Director Institute for Business Development and Competitiveness Petri Rouvinen, Research Director School of Economics, University College Cork Pekka Ylä-Anttila, Managing Director Justin Doran, Principal Associate Eleanor Doyle, Director France Catherine Kavanagh, Principal Associate HEC School of Management, Paris Bertrand Moingeon, Professor and Deputy Dean Forfás, Economic Analysis and Competitiveness Department Bernard Ramanantsoa, Professor and Dean Adrian Devitt, Manager Conor Hand, Economist Germany WHU—Otto Beisheim School of Management Israel Ralf Fendel, Professor of Monetary Economics Manufacturers’ Association of Israel (MAI) Michael Frenkel, Professor, Chair of Macroeconomics and Dan Catarivas, Director International Economics Amir Hayek, Managing Director Zvi Oren, President Ghana Association of Ghana Industries (AGI) Italy Patricia Addy, Projects Officer SDA Bocconi School of Management Nana Owusu-Afari, President Secchi Carlo, Full Professor of Economic Policy, Bocconi Seth Twum-Akwaboah, Executive Director University Paola Dubini, Associate Professor, Bocconi University Greece Francesco A Saviozzi, SDA Professor, Strategic and SEV Hellenic Federation of Enterprises Entrepreneurial Management Department Michael Mitsopoulos, Senior Advisor, Entrepreneurship Thanasis Printsipas, Economist, Entrepreneurship Japan Keio University Hong Kong SAR Yoko Ishikura, Professor, Graduate School of Media Design Hong Kong General Chamber of Commerce Heizo Takenaka, Director, Global Security Research Institute David O’Rear, Chief Economist Jiro Tamura, Professor of Law, Keio University Federation of Hong Kong Industries Keizai Doyukai (Japan Association of Corporate Executives) Alexandra Poon, Director Kiyohiko Ito, Managing Director, Keizai Doyukai The Chinese General Chamber of Commerce 402 | The Financial Development Report 2012 Partner Institutes Jordan Mexico Ministry of Planning & International Cooperation Center for Intellectual Capital and Competitiveness Jordan National Competitiveness Team Erika Ruiz Manzur, Executive Director Kawther Al-Zou’bi, Head of Competitiveness Division René Villarreal Arrambide, President and Chief Executive Basma Arabiyat, Researcher Officer Mukhallad Omari, Director of Policies and Studies Department Rodrigo David Villarreal Ramos, Director Kazakhstan Instituto Mexicano para la Competitividad (IMCO) National Analytical Centre Priscila Garcia, Researcher Diana Tamabayeva, Project Manager Manuel Molano, Deputy General Director Vladislav Yezhov, Chairman Juan E Pardinas, General Director Kenya Ministry of the Economy Institute for Development Studies, University of Nairobi Jose Antonio Torre, Undersecretary for Competitiveness and Mohamud Jama, Director and Associate Research Professor Standardization Paul Kamau, Senior Research Fellow Enrique Perret Erhard, Technical Secretary for Competitiveness Dorothy McCormick, Research Professor Narciso Suarez, Research Director, Technical Secretary for Competitiveness Korea, Republic of College of Business School, Korea Advanced Institute of Morocco Science and Technology KAIST Comité National de l’Environnement des Affaires Byungtae Lee, Acting Dean Seloua Benmbarek, Head of Mission Soung-Hie Kim, Associate Dean and Professor Jinyung Cha, Assistant Director, Exchange Programme Netherlands INSCOPE: Research for Innovation, Erasmus University Korea Development Institute Rotterdam Joohee Cho, Senior Research Associate Frans A J Van den Bosch, Professor Yongsoo Lee, Head, Policy Survey Unit Henk W Volberda, Director and Professor Kuwait Nigeria Kuwait National Competitiveness Committee Nigerian Economic Summit Group (NESG) Adel Al-Husainan, Committee Member Frank Nweke Jr., Director General Fahed Al-Rashed, Committee Chairman Chris Okpoko, Associate Director, Research Sayer Al-Sayer, Committee Member Foluso Phillips, Chairman Malaysia Norway Institute of Strategic and International Studies (ISIS) BI Norwegian Business School Jorah Ramlan, Senior Analyst, Economics Eskil Goldeng, Researcher Steven C.M Wong, Senior Director, Economics Torger Reve, Professor Mahani Zainal Abidin, Chief Executive Pakistan Malaysia Productivity Corporation (MPC) Mishal Pakistan Mohd Razali Hussain, Director General Puruesh Chaudhary, Director Content Lee Saw Hoon, Senior Director Amir Jahangir, Chief Executive Officer Panama INCAE Business School, Latin American Center for Competitiveness and Sustainable Development (CLACDS) Ronald Arce, Researcher Arturo Condo, Rector Marlene de Estrella, Director of External Relations Lawrence Pratt, Director The Financial Development Report 2012 | 403 Partner Institutes Peru Singapore Centro de Desarrollo Industrial (CDI), Sociedad Nacional Economic Development Board de Industrias Anna Chan, Assistant Managing Director, Planning & Policy Néstor Asto, Project Director Cheng Wai San, Head, Research & Statistics Unit Luis Tenorio, Executive Director Teo Xinyu, Executive, Research & Statistics Unit Philippines Slovak Republic Makati Business Club (MBC) Business Alliance of Slovakia (PAS) Michael B Mundo, Chief Economist Robert Kicina, Executive Director Marc P Opulencia, Deputy Director Peter Angelo V Perfecto, Executive Director South Africa Business Leadership South Africa Management Association of the Philippines (MAP) Friede Dowie, Director Arnold P Salvador, Executive Director Thero Setiloane, Chief Executive Officer Poland Business Unity South Africa Economic Institute, National Bank of Poland Nomaxabiso Majokweni, Chief Executive Officer Piotr Boguszewski, Advisor Joan Stott, Executive Director, Economic Policy Jarosław T Jakubik, Deputy Director Spain Portugal IESE Business School, International Center for PROFORUM, Associaỗóo para o Desenvolvimento Competitiveness da Engenharia Marớa Luisa Blỏzquez, Research Associate Ilídio António de Ayala Serơdio, Vice President of the Board Antoni Subirà, Professor of Directors Sweden Fórum de Administradores de Empresas (FAE) International University of Entrepreneurship and Technology Paulo Bandeira, General Director Niclas Adler, President Pedro Carmo Costa, Member of the Board of Directors Esmeralda Dourado, President of the Board of Directors Switzerland University of St Gallen, Executive School of Management, Romania Technology and Law (ES-HSG) SC VBD Alliance Consulting Srl Rubén Rodriguez Startz, Head of Project Irina Ion, Program Coordinator Tobias Trütsch, Communications Manager Rolan Orzan, General Director Tanzania Russian Federation Research on Poverty Alleviation (REPOA) Bauman Innovation & Eurasia Competitiveness Institute Cornel Jahari, Assistant Researcher Katerina Marandi, Programme Manager Johansein Rutaihwa, Commissioned Researcher Alexey Prazdnichnykh, Principal and Managing Director Samuel Wangwe, Professor and Executive Director Stockholm School of Economics, Russia Thailand Igor Dukeov, Area Principal Sasin Graduate Institute of Business Administration, Carl F Fey, Associate Dean of Research Chulalongkorn University Pongsak Hoontrakul, Senior Research Fellow Saudi Arabia Narudee Kiengsiri, President of Sasin Alumni Association National Competitiveness Center (NCC) Toemsakdi Krishnamra, Director of Sasin Awwad Al-Awwad, President Khaldon Mahasen, Vice President Thailand Development Research Institute (TDRI) Somchai Jitsuchon, Research Director Chalongphob Sussangkarn, Distinguished Fellow Yos Vajragupta, Senior Researcher 404 | The Financial Development Report 2012 Partner Institutes Turkey TUSIAD Sabanci University Competitiveness Forum Izak Atiyas, Director Selcuk Karaata, Vice Director Sezen Ugurlu, Project Specialist Ukraine CASE Ukraine, Center for Social and Economic Research Dmytro Boyarchuk, Executive Director Vladimir Dubrovskiy, Leading Economist United Arab Emirates Abu Dhabi Department of Economic Development H.E Mohammed Omar Abdulla, Undersecretary Dubai Economic Council H.E Hani Al Hamly, Secretary General Institute for Social and Economic Research (ISER), Zayed University Mouawiya Alawad, Director Emirates Competitiveness Council H.E Abdulla Nasser Lootah, Secretary General United Kingdom LSE Enterprise Ltd, London School of Economics and Political Science Adam Austerfield, Director of Projects Niccolo Durazzi, Project Manager Robyn Klingler Vidra, Researcher Venezuela CONAPRI—The Venezuelan Council for Investment Promotion Litsay Guerrero, Economic Affairs and Investor Services Manager Eduardo Porcarelli, Executive Director Vietnam Ho Chi Minh City Institute for Development Studies (HIDS) Nguyen Trong Hoa, Professor and President Du Phuoc Tan, Head of Department Trieu Thanh Son, Researcher The Financial Development Report 2012 | 405 The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas Incorporated as a not-for-profit foundation in 1971 and headquartered in Geneva, Switzerland, the Forum is tied to no political, partisan, or national interests World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Tel +41 (0) 22 869 1212 Fax +41 (0) 22 786 2744 contact@weforum.org www.weforum.org ... continue to deteriorate xiv | The Financial Development Report 2012 Part Findings from the Financial Development Index 2012 The Financial Development Report 2012 | CHAPTER 1.1 The global economic outlook... contributed to the Report Any findings contained in the Report are solely the views of the Report? ??s authors and not reflect the opinions of the Academic Advisors The Financial Development Report 2012 |... instruments, and services | The Financial Development Report 2012 1.1: The Financial Development Index 2012 Figure 1: Composition of the Financial Development Index Financial Development Index FACTORS,