Question

provide two differences between developing and developed country financial systems

Answer 1

The first difference is the degree of efficiency in the financial system. Financial system of developed country is more efficient market than that of financial system and market of developing countries. It means that there is a more scope of arbitrage in financial market of the developing countries.

The second difference is the level of volatility in the financial system. The financial system of developing countries is still evolving and creates more volatility due to lack of confidence shown by the overseas investors. But, financial system of developed countries is already established and robust, so add relatively less volatility.