Abstract
The financial markets of emerging economies have seen a huge growth in the last few years. These markets are attracting large investments from the developed world, especially because of higher expected return. At the same time; investments in emerging markets are considered to be riskier than the other similar investments in the developed market. A major reason for a higher risk is the state of financial markets in emerging economies. In the paper, we would look at the broad characteristics of the financial markets in the emerging economies and see how they are different from the financial market of developed economies.
Banking Industry: There have been many recent developments in the banking Industry in emerging economies, such as competition and consolidation. The developments are being driven by technological innovation, deregulation and changes in corporate behaviour, in some cases accentuated by recent banking crises. Important aspects include privatisation of state-owned banks, mergers of domestic banks and entry of foreign banks. We look into the banking industry and see how far the banking system has developed and what is the road ahead.
Capital Market: Emerging Capital markets are considered to de more volatile compared to the capital markets in developed economies.
