Fitting assistance within the scope of this activity, though, is a separate question. Stock exchanges are institutions of the capital market rather than the money market, but we discuss them because of the role they could play in providing a secondary market for money market instruments, too, starting with government treasury obligations. Even though trading may be very light in Treasury bills, the local stock markets may be the only secondary market in town. Generally, money markets have preceded stock markets in economic development. Until the last decade stock markets have arisen in countries where money markets were already advanced by the standards of the era.
Stock markets rely on the infrastructure of banks and the payments system.
The money market and the payments system can keep functioning even if the stock market experiences a crisis, but if the money market and the payments system do not function, the stock market cannot function either. Consequently, money markets and their institutions will play a larger role in economic development than stock markets in the target countries until those countries become considerably richer. Currently, there are few suppliers of stock because there are few relatively large local companies. There are few demanders of stock because many people are so poor they do not even have bank accounts. People typically take on the risk of investing in stocks only after they have secured a modicum of financial wealth in the lower-risk form of bank accounts.