ABSTRACT
A number of common preconditions must prevail if a market-orientated financial system or national economy is to develop and function effectively. Those relating to financial sector development rest on three principles: institutional and legal, largely legal and related mainly to policy. This chapter examines the relationships within East Asia between economic development, governance, property rights, provisions for the deployment of collateral and the creation of secured financial transactions and creditor rights and their relationship with insolvency. The role and development of financial intermediaries have become a focus of attention only recently in law, financial policy, and economics, although each discipline is directly concerned with both the problem and its several explanations. The importance of property rights began to receive significant contemporary attention when the disintegration of the Soviet bloc introduced the challenge of transforming command economies to market-based systems. Established and accepted property rights and their identification and protection, including rights over intellectual property are essential in any market economy.
