Countries with higher levels of financial development have experienced more rapid growth (Arestis et al 2001; Beck and Levine 2001; Blackburn et 2005; Carlin and Ma 2003, Fisman and Love 2004) and lower poverty (Beck et al. 2007; Honohan 2004; Jalilian and Kirkpatrick 2005). Given that most developing countries have traditionally had bank-based systems and poorly developed capital markets, the development of more balanced financial systems that promises to improve the collective welfare of society requires policy reforms that support the growth of capital market.