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financial reform

Strengthening Lao PDR’s financial system by making room for failure

José de Luna-Martínez's picture


To function properly, a financial system needs to have two doors in place: an “entry” and an “exit”. The first one enables qualified local or foreign institutions to enter the marketplace to provide innovative products and services – such as savings, investments, credits, payments and insurance – to households and firms at competitive prices. The second facilitates the rapid and orderly dissolution of those financial intermediaries that are not able to survive competition, manage risks properly, or comply with rules and regulations.

Why We Should Favor (Slightly) Less Efficient Financial Markets

Jamus Lim's picture

Lost in many of the post-crisis financial reform proposals to rein in destructive financial innovation---such as calls to ban naked CDS, establish centralized clearinghouses for derivatives, and eliminate high-frequency trading---is the broader issue of whether these innovations could actually enhance welfa