IMF Working Papers

Capital Market Integration: Progress Ahead of the East African Community Monetary Union

By Masafumi Yabara

January 1, 2012

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Masafumi Yabara. Capital Market Integration: Progress Ahead of the East African Community Monetary Union, (USA: International Monetary Fund, 2012) accessed September 27, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Capital markets in the East African Community (EAC) face common challenges of low capitalization and liquidity, but to different degrees. EAC member countries have made noticeable progress in developing domestic capital markets through a regional approach, removing constraints on capital transactions and harmonizing market infrastructure. Nevertheless, empirical analysis suggests capital market integration has not deepened during the past few years in the EAC, although convergence of investment returns is taking place to some extent. Learning from the experience of the West African Economic and Monetary Union and the Association of Southeast Asian Nations, EAC countries would benefit from four actions to accelerate financial market integration: (i) further harmonize market infrastructure; (ii) strengthen regional surveillance mechanisms; (iii) encourage local currency bond issuance by multilateral financial institutions; and (iv) build the capacity of the existing regional institutions.

Subject: Capital market integration, Capital markets, Economic integration, Financial institutions, Financial markets, Securities markets, Stock markets, Treasury bills and bonds

Keywords: Beta convergence, Bond, Capital market, Capital market integration, Capital markets, Cointegration, Debt, EAC capital market integration, EAC capital markets, EAC debt markets, EAC Treasury Bill, EAC treasury bill market, EAC treasury bond bond market, East African Community, Equity, Global, Market infrastructure, Monetary union, Regional integration, Securities markets, Sigma convergence, Stock, Stock markets, Sub-Saharan Africa, Treasury bills and bonds, West Africa, WP

Publication Details

  • Pages:

    31

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2012/018

  • Stock No:

    WPIEA2012018

  • ISBN:

    9781463931230

  • ISSN:

    1018-5941

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