Answered step by step
Verified Expert Solution
Question
1 Approved Answer
According to World Bank report, in developing economies with lower per capita income, the banking system is more deeply entrenched than Non-bank Financial Institutions (NBFIs)
According to World Bank report, in developing economies with lower per capita income, the banking system is more deeply entrenched than Non-bank Financial Institutions (NBFIs) and securities markets, and the value of bank assets tends to be a larger multiple of equity market capitalization than higher income countries. See the figure below FIGURE 2: RATIO OF BANK ASSETS TO MARKET CAPITALIZATION AND PER CAPITA GDP 10 0 $200 $3,000 $40000 GDP per capita (ratio scale) Source: World Bank Choose one developing economy and one developed economy and find their Per Capita GDP. Then compute ratio of "bank assets/market capitalization" for both countries and briefly discuss (Hint: Search on google. Find all numbers in US dollars. "Bank assets" will be the total value of all banks assets in the country you choose. Similarly, "market capitalization" is the total market value of all companies listed in the stock exchange of that country)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started