Development Centre Studies Capital Markets in the Dominican Republic: Tapping the Potential for Development

This report presents a detailed analysis of the Dominican Republics financial system and offers a series recommendations to develop the countrys capital markets. The country has recently made big advances in the development of its capital markets, achieving high solvency in the banking sector, improving  the institutional framework for the management of public debt and experiencing steady growth in the value of both the private bond market and the assets of pension funds. However, the level of financing directed to the economy is still small, given the countrys level of development, and there are important structural challenges that need to be addressed. Both the Central Bank and the Finance Ministry issue public debt, each with different purposes, and there appears to be little coordination between the two organs in terms of rate of returns and maturity of the issued bonds. The primary market of private bonds suffers from a long and complicated issuing process that stems from coordination and communication problems among the different regulators. The bond secondary market lacks key aspects of market infrastructure. Finally, institutional investors invest mostly on public debt instruments and bonds issued by finance sector firms.

Table of Content :

Chapter 1. The state and general framework of the financial markets
Chapter 2. Macroeconomic context
Chapter 3. Characteristics and challenges of the financial system
Chapter 4. The public debt market
Chapter 5. The private debt market and capital market regulation
Chapter 6. Institutional investors
Chapter 7. Financial literacy, new instruments and market expansion