The addition of distinct capital markets outside of banking systems is possible only if scarce real resources are devoted to building a financial infrastructure. It is a laborious process whose payoff is often experienced only decades later. It is thus difficult to initiate, especially in emerging economies that are struggling to edge above the poverty level.
They perceive the need to concentrate on high short-term rates of return to capital rather than accept more moderate returns stretched over a longer horizon. We must continuously remind ourselves that financial infrastructure comprises a broad set of institutions whose functioning, like all else in a society, must be consistent with the underlying value system and hence its time preference.