Building Local Bond Markets: An Asian Perspective

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Alison Harwood
World Bank Publications, Jan 1, 2000 - Business & Economics - 286 pages
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Since the Asia and Tequila crises of the late 1990s, a growing number of emerging market countries have focused on developing local bond markets to lock in local currency, fixed-rate and long-term funding, and help governments and corporations better manage their financing risks. International organizations from Washington to Southeast Asia are pushing bond market development, to reduce global instability by improving domestic risk management. This book is part of the International Finance Corporation's efforts to assist countries in South Asia and other parts of the world to identify their need for local bond markets, the impediments to developing them, and how those impediments might be removed. The book is based on papers presented at the South Asian Debt Market Symposium held in Sri Lanka in October 1999. It provides valuable insights to emerging market nations wrestling with the issue of building local bond markets. This book will be of interest to bond market specialists, policymakers, and the private sector.
 

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Page ii - China also benefits from the activities of the International Finance Corporation (IFC), a member of the World Bank Group that promotes private enterprise in developing countries.
Page 102 - ... market. Money markets enable non-financial enterprises, banks, brokers, dealers, and institutional investors to manage their cash positions. An efficient mechanism in money markets for financing is repurchase agreements (repos) or, more generally, securities lending and borrowing. Repos enable dealers to take long and short positions in a flexible manner, buying and selling according to customer demand on a relatively small capital base. When there are no repos markets, funding has to be in the...
Page 153 - The specified public financial institutions are the Industrial Finance Corporation of India, the Industrial Development Bank of India and the Industrial Credit and Investment Corporation of India.
Page 104 - ... focussed regulatory authority over an increasingly sophisticated capital market. June 1999 The National Bond Market Committee (NBMC) was established to provide the policy direction and to rationalise the regulatory framework for the development of the bond market. As an initial step to rationalise the regulatory framework, NBMC announced that the Securities Commission would be the single regulatory authority for the supervision and regulation of the corporate bond market. The members of NBMC...
Page 97 - This paper reflects the views of the author, and not necessarily the views of the Department of State.
Page 53 - This adds instability to the balance sheet by "doubling up" the effect of both good events and bad events. In domestic US markets, debt and equity analysts are extremely sensitive to these types of unstable capital structures, and they will penalize a company whose balance sheet incorporates too much market risk.
Page 58 - The problem is not that global financial markets are too volatile or free capital flows too dangerous, but that sovereign capital structures are not usually designed with this volatility in mind.
Page 106 - On the regulatory front, the Securities and Exchange Board of India (SEBI) was established in 1992...
Page 57 - Because the policies of small countries already suffer from low credibility, and because an unstable national balance sheet is the most common cause of financial collapse, sharp increases in volatility can seriously threaten their stability.
Page 53 - US dollars, whose value in real terms is declining if the local currency is strengthening, the real cost of the borrower's existing debt continuously drops.

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