Equity and Private Debt Markets in Central America, Panama, and the Dominican Republic

This study focuses on equity, private debt, and asset-backed securities markets in Central America. These markets are generally under-developed throughout the region due to several structural problems, economic and political factors, and weaknesses in regulation and in institutional investor base. The paper identifies key country-specific recommendations to strengthen securities laws, regulatory oversight, market infrastructure, investor base, and new products such as asset-backed securities. Despite these efforts, developing seven viable private capital markets is a difficult goal. The paper thus also explores the benefits and difficulties of creating a single capital market in a region still short of full economic integration.

Keywords: Central America, equity, debt, securitization, financial integration, capital market development, securities regulation, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama

JEL Classification: G21, G23, G28, K22, N26

Suggested Citation: Suggested Citation

Shah, Hemant C. and Carvajal, Ana and Bannister, Geoffrey J. and Chan-Lau, Jorge Antonio and Guerra, Ivan, Equity and Private Debt Markets in Central America, Panama, and the Dominican Republic (December 19, 2007). International Monetary Fund Working Paper No. WP/07/2008, Available at SSRN: https://ssrn.com/abstract=1077559 or http://dx.doi.org/10.2139/ssrn.1077559