Financial systems of many emerging markets are subject to relatively large macroeconomic shocks and to potential transitional problems in the context of financial deregulation, and may be prone to greater swings of sentiment than in more developed markets.10 All such considerations should be taken into account when setting minimum requirements.
The third strategic implication is that market discipline must be a complement to, rather than a substitute for, the traditional activities of regulators and policy-makers. Publicly available information may arrive too late or be of too poor quality to support adequate market discipline.