The Los Angeles-based Milken Institute recently published a capital access index which rated countries on a variety of financial factors.

• They included bank assets, stock market capitalizations, stock market liquidity, the size and composition of the market for debt, and the market-adjusted debt ratio.

• As for government policy, high marks were awarded for lower tax rates on capital gains, higher write-offs on losses, ease of entry into banking, open investment laws, well-defined shareholder and creditor rights, lower tax rates overall, less corruption, less government intervention and greater competitiveness.

• Not surprisingly, the U.S., Switzerland and Hong Kong took the top three spots -- although the U.S. was faulted for high rates of corporate taxation.

• Russia finished last, just behind Poland, Venezuela, Indonesia and Greece.

The report recommended that nations make it easier for foreign banks to buy domestic ones and compete for customers. Also, they should maintain floating exchange rates and make their financial systems more transparent.

Source: Macroscope, "How Nations Prosper," Investor's Business Daily, November 3, 1999.