摘要：F
INANCIAL markets in smaller economies have the
potential, in theory, to provide important benefi ts.
These include more effective monetary and fi scal
policies, higher risk transfer, increased corporate
fi nancing, and greater integration into the world economy.
But the analytical foundations for what it takes to develop
fi nancial markets in smaller economies is limited because
cross-country research so far has focused on fi nancial mar-
ket development in advanced and emerging market coun-
tries. Moreover, the policies needed to develop fi nancial
markets in smaller countries tend to be more country spe-
cifi c because small economies are quite different from one
another (see box).
This article addresses that analytical gap and suggests
policies for developing “essential” financial markets—foreign
exchange, money, government security, and equity—in small
economies. These markets are essential because they provide
the most basic level of financial services. This article also
outlines a sequence of steps that small countries can follow,
while recognizing that one-size-fits-all approaches do not
work for these countries.
