Regulatory Lessons from the Crisis of Costa Rica’s Mutual Fund Industry
Electronic Access:
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Summary:
In 2004, the mutual fund industry of Costa Rica experienced a massive run by investors that reduced the industry to half its size in a month. This paper explores how weaknesses in the regulatory framework played a role in the crisis and draws lessons for developing countries. The analysis of events demonstrates the need for developing countries to design a multi-pillar framework for securities regulation as well as to strengthen financial literacy and capacity building. At the micro level it shows the importance of market conduct rules and the challenges that the implementation of mark-to-market poses for developing markets.
Series:
Working Paper No. 2006/288
Subject:
Banking Money markets Mutual funds Nonbank financial institutions Securities markets
Frequency:
Bimonthly
English
Publication Date:
December 1, 2006
ISBN/ISSN:
9781451865486/1018-5941
Stock No:
WPIEA2006288
Pages:
26
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