One reason financial systems in developing and transition countries are underdeveloped is
A)they have weak links to their governments.
B)they make loans only to nonprofit entities.
C)the legal system may be poor making it difficult to enforce restrictive covenants.
D)the accounting standards are too stringent for the banks to meet.

Question

Quizplus · Accepted Answer

Poor legal systems can make it difficult to enforce loan agreements, lack of trust in the legal system and courts can discourage people from engaging in financial transactions, and this can inhibit the development of financial markets.

One Reason Financial Systems in Developing and Transition Countries Are