BRIEF

Capital Markets

February 2, 2018



Overview:

An estimated $4 trillion annual investment is required for developing countries to achieve the Sustainable Development Goals (SDGs) by 2030. In light of the investment requirement and the Maximizing Financing for Development (MFD) strategy – helping countries maximize their development resources by drawing on private sector financing – there is a greater need to develop and strengthen capital markets in order to mobilize commercial financing. The role that capital markets can have in financing strategic sectors such as infrastructure, corporate, and SMEs and the links with economic growth are increasingly being highlighted in the G20 agenda.

We assist countries in developing deep and resilient capital markets that contribute to growth and financial stability. 

Well-functioning capital markets require incentive structures to “crowd in” commercial investors, an enabling policy and regulatory framework, and synchronization of robust regulatory framework with institutional capacity. We work on these building blocks for capital market development.

What We Do:

The World Bank Group is scaling up its overall commitment to emerging economies, which face staggering funding gaps especially in the areas of infrastructure, housing, and agriculture. We develop tailored, context-specific, capital markets solutions to finance these sectors.

We offer a range of products and services tailored to the specific development needs of our client countries:

  • Capital Market Development (Upstream) Advisory Services: We provide advisory services to countries in all regions and at different levels of development. This includes advising governments on regulatory and policy framework for overall capital market development, on government bonds, and on financing physical infrastructure through the capital market platform.
  • Downstream Advisory Services: The scope of advisory services vary depending on each country’s “strategic country diagnostics” and client demand. It could cover one of more sectors of the capital markets – ranging from working on specific market infrastructures such as implementing trading or clearing & settlement platforms to working on demonstration transactions in specific sectors (for example infrastructure finance or housing finance).
  • Capital Markets Diagnostics: Through the Financial Sector Assessment Program (FSAP), we analyze the strength of economies’ capital markets to inform concrete actions to build resilience into the capital markets.
  • Product Development: Innovative financial products are necessary to help countries meet development finance needs, leverage the private sector as financier, operator, or service provider in SDG related areas, and effectively manage risks. We collaborate with other practices and cross-cutting solution areas to devise strategies for product development and design innovative products that play a crucial role in the further development of capital markets.  
  • Peer Group Dialogues: Initially launched in 2009 focusing on government bond market development, the peer group dialogues have proven to be valuable with the potential to be expanded to many other areas based on client needs and interests. The objective of this service is to facilitate cross-country knowledge sharing on development challenges and opportunities among counties in select peer groups.
  • Knowledge Management: We disseminate the knowledge acquired through project implementation and research through policy notes, thought-leadership analyses and country studies as well as through conferences, workshops, and internal & external training sessions.  

Last Updated: Feb 02, 2018




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