Innovations In Emerging Markets

The Rush To Global Accounting Standards

Having just one set of accounting rules for the whole world sounds like a great idea --- until companies actually have to start using them, says a Financial Times column. There are so many differences between companies, countries, and sectors that no one will apply the rules in the same way.

Not only that, but putting too much emphasis on accounting rules can create unrealistic expectations about what can be expected in financial reports.

IFC's Corporate Governance Methodology employs specialized assessment tools tailored to the different governance priorities of publicly listed companies, founder- and family-owned firms, financial institutions, and newly privatized enterprises. IFC uses this methodology as an input into their governance practices. To find out more, click here.

Emerging Markets Head For Banner Year In 2006

IFC said booming Emerging Markets are destined for another super-profitable year in 2006 but their economies are suffering from uneven growth rates and widespread poverty, Reuters, Dow Jones, and International Trade Finance reports. IFC EVP Lars Thunell said, "Emerging markets as a group have proved they can sustain high growth and attract capital. There is a tremendous dynamism, but there is a huge unfinished agenda."

To learn more about IFC's vision for Emerging Markets, click here.

Private Capital Flows To Emerging Market Economies

A paper by the Institute of International Finance says that private capital flows to emerging economies will remain relatively high in 2005, but risks have increased as investors are concerned about a less-friendly global economic environment.

IFC's 2005 Strategic Directions Paper agrees that private capital flows continue to recover, with concentration in larger economies, and emphasizes the growth of South-South opportunities.

Recent Trends In Privatization

A World Bank Working Paper on recent developments in privatization says that continued efforts need to be made in exposing state enterprises to market discipline through new private entries and improvements in the corporate governance of those firms. IFC's experience advising client governments and state-owned enterprises on divestiture is available in "Lessons of Experience No. 1: Privatization, Principles, and Practice."

Improving Board Performance In Emerging Market Companies

McKinsey Quarterly says in a recent article that some of the challenges faced by corporate boards in emerging markets include high concentration of ownership, lack of experienced directors, and underdeveloped legal regimes.

The IFC-World Bank Corporate Governance Group helps companies and countries improve standards of corporate governance by focusing on shareholder and stakeholder rights, board member duties, disclosure, and effective enforcement. To find out more, click here.

Developing Local Corporate Bond Markets

In a recent speech, Bank for International Settlements General Manager Malcolm Knight discussed how a strong financial system requires a wide variety of financing channels in which banks and fixed income markets compete in onlending to deficit agents. Knight encouraged Asian central bankers to share their experiences in developing their corporate bond markets, and said that Malaysia, Korea, and Australia were good examples of how such markets had been well developed.

Building local currency bond markets is an important issue for emerging economies. IFC has put out its own guide, "Building Local Bond Markets: An Asian Perspective."