# **Table  1.1: Equities, Bonds, and Bank Loans Compared to Nominal GDPs in Selected Developing and Industrial Countries**

|||_Savi_|_s_|||||||<br>_Eu_|_ties_<br>_(U.S. dolla_|_As of Dec_<br>_rs in billion_<br>_Bank claim_|_ember 2007_<sup>_+_</sup><br>_GDP)_<br>_ivate_<br>_s, % of_<br>_s on r_|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
||_GDP_|<br>_(Dec. 2_|_g_<br>_006)_|_Total b_|_s_<br>_ond_|_Governm_|_ds_<br>_ent bon_|_Corporat_|_nds_<br>_e bo_|<br>_q_<br>_(Dec._|<br>_005)_<br>_2_|<br>_sector(D _|<br>_)_<br>_p_<br>_ec. 2005_|
|_Country_|_(Dec. 2006)_|_Amount_|_% of GDP_|_t_<br>_Amoun_|_P_<br>_% of GD_|_n_<br>_Amou t _|_D_<br>_% of G P _|_u_<br>_Amo nt_|_D_<br>_% of G P _|_o_<br>_Am unt_|_% of GDP_|_o_<br>_Am unt_|_GDP_<br>_% of_|
|Argentina|214.2|61.4|28.6|7<br>75.|.4<br>35|63.1|29.4|12.7|5.9|62.0|33.8|18.8|10.3|
|Brazil|1,067.5|210.3|19.7|2<br>952.|.2<br>89|4.1<br>69|65.0|8.1<br>25|24.2|50.1<br>4|51.0|332.1|37.6|
|Chile|145.8|51.0|34.9|7<br>42.|.3<br>29|14.5|10.0|28.2|19.3|131.8|110.9|74.2|62.4|
|Mexico|839.2|173.4|20.7|4<br>355.|.3<br>42|1.6<br>19|22.8|3.8<br>16|19.5|06.7<br>2|26.9|129.1|16.8|
|Peru|92.4|26.8|29.0|1<br>22.|.9<br>23|17.5|18.9|4.6|5.0|28.5|35.9|14.3|18.1|
|Bolivia|11.2|2.4|21.9|na|na|na|na|na|na|2.1|22.6|3.6|38.2|
|Colombia|153.4|32.3|21.1|2<br>52.|.1<br>34|51.4|33.5|0.8|0.5|36.0|29.2|27.4|22.3|
|India|911.8|283.2|31.1|4<br>458.|.3<br>50|6.9<br>41|45.7|41.5|4.6|72.6<br>5|71.1|297.1|36.9|
|Indonesia|364.8|107.1|29.4|0<br>88.|.1<br>24|78.7|21.6|9.3|2.5|77.9|27.2|66.0|23.0|
|Korea|888.0|274.3|30.9|5<br>1,107.|.7<br>124|6.0<br>46|52.5|1.5<br>64|72.2|579.1|73.2|995.4|125.8|
|Malaysia|150.7|56.8|37.7|6<br>178.|.5<br>118|69.7|46.2|8.9<br>10|72.3|88.3<br>1|44.0<br>1|165.6|126.6|
|Philippines|117.6|15.4|13.1|2<br>54.|.1<br>46|52.6|44.8|1.6|1.3|34.8|35.4|30.1|30.6|
|Thailand|206.3|65.6|31.8|0<br>136.|.9<br>65|94.7|45.9|41.3|20.0|20.3<br>1|68.2|159.6|90.5|
|Czech Rep.|143.0|43.2|30.2|4<br>104.|.0<br>73|84.9|59.4|19.5|13.6|35.3|28.5|41.0|33.1|
|Hungary|112.9|28.9|25.6|1<br>70.|.1<br>62|63.5|56.2|6.6|5.8|31.2|28.3|53.0|48.0|
|Poland|338.7|66.4|19.6|6<br>162.|.0<br>48|2.6<br>16|48.0|na|na|84.2|27.8|79.7|26.3|
|Slovakia|55.0|13.4|24.3|0<br>19.|.6<br>34|19.0|34.6|na|na|4.5|9.6|15.0|31.7|
|Russia|986.9|324.5|32.9|6<br>40.|4.1|40.6|4.1|na|na|554.2|72.5|173.5|22.7|
|South Africa|255.2|43.5|17.1|7<br>120.|.3<br>47|72.2|28.3|48.5|19.0|518.4|214.1|160.5|66.3|
|U.S.*|13,163.9|1,677.6|13.5|8<br>24,313.|.7<br>184|0.6<br>6,59|50.1|3.2<br>17,72|34<br>1<br>.6|57.8<br>16,7|3<br>1 5.0|952.9<br>22,|184.9|
|Japan*|4,368.4|1,126.2|24.8|7<br>8,855.|.7<br>202|5.1<br>7,14|3.6<br>16|0.7<br>1,71|39.2|10.3<br>4,8|06<br>1<br>.1|440.6<br>4,|97.9|
|U.K.|2,377.0|322.7|13.6|0<br>1,359.|.2<br>57|3.0<br>90|38.0|6.0<br>45|19.2|74.5<br>2,9|135.1|416.4<br>3,|155.2|
|Germany|2896.9|671.9|23.2|6<br>2629.|.8<br>90|3.0<br>139|48.1|6.6<br>123|42.7|24.6<br>12|43<br>.8|103.3<br>3|111.0|
|_Sources_: BIS Qu<br>_Notes:_|, <br>arterly Review Jun|e 2008, Wor|<br>ld Developme|,<br>nt Indicators|, World Bank|,<br>Financial Se|ctor Develop|,<br>ment Indicator|s, staff calcul|<br>,<br>ation.||,||

1. na = not available

2. GDP figures are nominal and taken from the World Bank Database, World Development Indicators.

3. Savings are from the World Bank Database, World Development Indicators.

4. Bonds are those in local currency taken from _BIS Quarterly Review_ June 2008. Corporate bonds include those by financial institutions and corporate issuers, except for Colombia and the Philippines. Bonds as a percentage of GDP are estimated based on nominal GDP for 2006.

5. Equities are those in local currency taken from the World Bank Database, World Bank Financial Sector Indicator.

6. Bank claims on the private sector are from the World Bank Database, World Bank Financial Sector Indicator. Bank claims are the closest available proxy for bank loans, although claims could also include other claims, such as equity securities. Bank claims on the private sector are taken here as approximations for loans to the private sector.

- + As of December 2006 for GDP and Savings, except for U.S. and Japan (*as of December 2005 for Savings). As of December 2005 for Equities and Bank claims.

investment products in local currencies to medium- and long-term investors, including contractual savings institutions. Efficient matching of demand and supply would generally reduce funding costs, increase investment yields, and minimize refinancing as well as reinvestment risks. The transferability of corporate bonds in the secondary market would reduce funding costs by lowering a liquidity premium. Thus, lessening maturity mismatches on the balance sheets of banks and contractual savings institutions would reduce systemic risk and increase financial efficiency in the economy through the efficient reallocation of debt capital. However, this scenario has not occurred thus far in many emerging economies.

Corporate bond market development has long focused on the market of stand-alone public offerings, overlooking hidden opportunity costs. In many emerging markets, the corporate bond market implies the market of stand-alone public offerings. Most regulatory efforts have been directed at enforcing the best possible disclosure for stand-alone public offerings. As a result, the overemphasis on stand-alone public offering norms has been making corporate bond issuance in emerging economies unnecessarily cumbersome and time consuming, compared with issuance of bank loans. The time-consuming nature of financing 4