Custodian banks and the evolution of the emerging capital markets: the case of Macedonia
Custodian banks and the evolution of the emerging capital markets: the case of Macedonia

Summary/Abstract: The development of an efficient capital market in the emerging countries is a long-term and diligent process. Building a modern financial infrastructure is crucial in this progress, by enabling effective flow of capital and mitigation of risk to markets when financial activities increase and internationalize. The custodians are one of the fundamentals of the financial infrastructure in running clearing and settlement systems. Though the legal and infrastructural frame is completed and well established since the very beginning of the evolvement of the capital market, the custody services in Macedonia are relatively new banking service. The objective of this paper is to examine the role of the custodian banks on the Macedonian capital market. The development of custody services opens good opportunities for entrance of new foreign and domestic institutional investors on the Macedonian market. In this paper we will evaluate the role of the custodians on the development of the Macedonian capital market by employing the pension funds who are their main institutional clients and we will compare the results with the Croatian custodians. We will make recommendation for further development of the custody activities based on the conclusions from our research.

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