“Development and expansion of the financial sector can serve as both the wind in the sails of a nation's economic growth and provide the even keel of greater financial stability,” said Marc Lackritz, President of SIA. “Countries that have embraced capital market liberalization grow faster, diversify risk better, improve capital allocation and reduce exposure to foreign currency-denominated debt. That makes financial services reform a win-win for both the nations that undertake it and for international trade.”
“Removing the barriers to global trade in financial services benefits national economies and capital markets by promoting capital formation and offering better portfolio returns and diversification,” said Joe Oliver, President and CEO of the Investment Dealers Association of Canada.
“ICMA’s members in over 40 countries around the world have had direct experience of the benefits international access to financial services bring to national financial markets and economies,” said Cliff Dammers, Head of Regulatory Policy at ICMA. “Lower cost of capital, more efficient delivery of financial services and the resultant better allocations of capital lead directly to economic growth and wealth creation.”
“Since Australia’s banking and financial markets were opened to foreign competition in the 1980s, the finance sector has performed strongly, underpinning healthy growth in the national economy,” according to Duncan Fairweather, Executive Director of IBSA. “Our experience is that liberalization of financial services trade enhances the capability of the market to deliver superior solutions to customers and allows home-based corporations to access financial services on the same basis as their global competitors – an important benefit for mid-sized and developing economies.”
The first paper “Recommendations For Liberalization of Trade In Capital Markets-Related Services” describes the contribution that a robust capital market can make to a country’s economic development and financial stability. It also emphasizes that sound and transparent regulation, which instills confidence in suppliers and consumers, is vital to a well-functioning market.
The paper calls for the free movement across borders for both consumers and suppliers of capital markets-related services. It argues that financial services, as well as the companies that provide such services, should also be free to cross borders. When they do, those companies and their services should receive the same legal treatment as their domestic counterparts, says the paper. In order to achieve these and other goals, the paper calls on developed nations to provide technical assistance to other countries on both a bilateral and multilateral basis.
The second paper, “Capital Markets Liberalization: A Powerful Catalyst for Growth of Developing Economies” documents why the liberalization of trade in financial services – and in capital markets-related services in particular – is central to advancing the goals of the Development Round. It examines both empirical research, which demonstrates that liberalizing trade in financial services can promote balanced economic growth, and financial system stability.
The third paper is a “Model Schedule” of WTO commitments for capital markets-related services. The Model Schedule is the industry’s view as to how the market opening principles contained in the Recommendations paper should be translated into WTO commitments. It is designed to be used by WTO member countries as they develop their own market opening offers, evaluate the market opening offers made by other members or undertake domestic liberalization measures outside the WTO context.
The reports will be posted on SIA’s website at: http://www.sia.com/international/html/wto.html
