In many Latin American and Caribbean economies low levels of domestic savings or underdeveloped private capital markets have made foreign lenders more reliable suppliers of capital than domestic sources. This chapter asks whether remittances could do something to improve this situation. There is an analogy to their microeconomic role discussed in the preceding chapter: receipt of remittances reduces the vulnerability of households, lessening the risk that they will fall into poverty when hard times hit the home economy. Likewise, inflows at the macroeconomic level which tend to be among the least volatile of foreign flows can make entire economies more stable. Do the actors in the capital markets in recipient countries – the government and major banks at least – take full advantage of the opportunities that an inward stream of remittances provides? Do rating agencies adequately take into account this benefit of remittance inflows when they calculate sovereign risk levels? In answering these questions it is appropriate to examine first how remittances affect the development of capital markets in emerging and developing economies. This chapter approaches this from two angles: first, the financial effect and, second, the impact on sentiment.