by judges trying to resolve particular cases.<sup>[See Beck,Demirgiuc-Kunt,Levine,and Maksimovic(2001:</sup> 204-205) for a detailed explanation of<sup>thesesystems.]</sup> 22 Demirguc,-Kunt and Levine (2001a: 132) 229 The authors define financial development as<sup>appliedin thisstudy as anassessment of the "efficiency</sup> with which financial intermediaries and markets<sup>(1) assessnew projectsand firms,(2) exertcorporate</sup> control, (3) ease risk management and (4) mobilize<sup>savings.[Beck,Demirguic-Kunt,Levine and</sup> Maksimovic (2001: 195)] 230 This is not an absolute measure.

231 Detailed descriptions of what the variables<sup>intheseindicatorsrepresentare presentedin TableG.8in the</sup> General Appendix.

232 Traditionally, creditors such as banks<sup>andinsurancecompanieswerekeyshareholdersof corporationsin</sup> Japan. However, the ownership structure of Japanese<sup>firmshasshiftedso that cross-shareholdingshave</sup> been reduced and foreign investors have increased.<sup>Furthermore, shareholdersareexercisingtheirrights</sup> actively. [Yasui (2001)] 233 Dore (2000) describes in detail the similarities<sup>betweenJapan'sandGermany'sformsof capitalism(i.e.,</sup> Rhenish capitalism) versus the Anglo-Saxon<sup>version thatisespoused by the USand UK.</sup> 234 Japan's Commercial Code, which provides<sup>protectionfor minority shareholders,was amendedin1993</sup> strengthening that protection.<sup>[Yasui (2001)]</sup> 235 Schmukler and Vesperoni (2001: 372) 236 World Bank (2002b: 78) 237 Nam et al (2001: 87-88) 238 Eichengreen (2001: 39) 239 Lamberte (2001: 137-139) 240 Kuroda (2001: 76) 241 Enron, an energy-trading company in Texas,<sup>declaredbankruptcy inDecember 2001.Surroundingthe</sup> bankruptcy are accusations of incompetence, conflict<sup>of interest and even corruption.This has led to calls</sup> for reforms to accounting standards, the auditing<sup>system, and corporategovernancein theU.S.</sup> 242 In January 2002, a foreign exchange trader at<sup>Allfirst wasaccused of being instrumentalin the lossof</sup> $750 million to the bank. This occurrence added<sup>tothecallsfor investigationsintoand reformof the</sup> financial services industry, particularly the accounting<sup>industry,inthe U.S.andEurope.</sup> 243 Demirguc-Kunt and Levine (2001b) 244 At the beginning of 2002, a compromise<sup>wasreachedon theimplementationof theLamfalussy</sup> proposals which are a series of reforms for the<sup>harmonizationof the regulationof Europeansecurities</sup> markets through "fast-track" legislation [Saltmarsh<sup>(2002:B4)].</sup> **245** Saltmarsh (2002: B4) 246 Saltmarsh (2002: B4) 247 Michael Richardson, "Asia Looks To Zones<sup>of Free Trade RegionUnlikelyto PushFor a Monetary</sup> Union," International Herald Tribune<sup>03 Jan.2002:9,08Jan.2002<http://www.djinteractive.com>.</sup> 248 Wyplosz (2001b: 21) 249 Some of the more recent studies included<sup>in thisreview are:Rodrik(1998),Klein and Olivei (2000),</sup> Chanda (2000), Arteta, Eichengreen, and Wyplosz<sup>(2001),Bekaert,Harvey, andLundblad(2001),and</sup> Edwards (2001).

**250** Arteta et al (2001: 26-27)

**231** IMF (2001d: 155-163)

> 2 52 IMF (2001d: 151)

**253** Kaplan and Rodrik (2001: 1)

254 Ariyoshi et al (2000) 255 Malaysia's controls were relaxed significantly<sup>in February1999.[AsianPolicy Forum(2000:3)]</sup> 256 Ariyoshi et al (2000)

**257** Kaplan and Rodrik (2001: 32)

**258** IMF (2001 d: 164)

> 2 59 IMF (2001d: 164)

260 Ariyoshi et al (2000: 28) 261 Ariyoshi et al (2000: 38) 128