Liquid markets for debt securities exist comprehensively in no East Asian economy other than Japan, even though short or medium-term bonds are issued in most and Asian borrowers are established (though generally not prolific) international issuers. Today¡¦s markets provide a borrowing medium (not always effectively) for Asian governments, financial institutions and some companies, but investor activity is closely correlated with bank credit creation. Above all, the region¡¦s markets provide no real guard against crisis or contagion, nor act as a balance to banking systems susceptible to distortion and event risk. Asia¡¦s economies may not suffer general capital shortages but poor resource allocation is pervasive and would be greatly improved by efficient national and regional financial markets. Seven years after its most profound financial crisis, Asia risks new contagion from any similar, unforeseen loss of confidence. Active debt capital markets would help limit such risks. The world¡¦s foremost bond markets developed as a result of intense national needs, and while economic growth will inevitably lead to greater bond issuance and trading this will be insufficient for the region¡¦s wider requirements without official sponsorship of active cooperative market reform. This paper contains three linked policy proposals: a matrix of steps to remove legal, fiscal, regulatory or systemic obstacles or omissions that hinder market usage; measures to encourage the development of a unified regional offshore market for local and major currency risk; and the concept of a regional body to promote the creation of asset-backed securities on a scale not previously contemplated and greatly expand activity in Asia¡¦s debt markets.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number
132004.
Length: 55 pages Date of creation: Jul 2004 Date of revision: Handle: RePEc:hkm:wpaper:132004
Contact details of provider: Postal: 55th Floor , Two International Finance Centre , 8 Finance Street , Central, Hong Kong Phone: (852)2878 1978 Fax: (852)2878 7006 Email: Web page: http://www.hkimr.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (HKIMR).
Related research
Keywords:
Other versions of this item:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
RAFAEL LaPORTA & FLORENCIO LOPEZ-de-SILANES & ANDREI SHLEIFER & ROBERT W. VISHNY, .
"Legal Determinants of External Finance,","
CRSP working papers
324, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997.
" Legal Determinants of External Finance,"
Journal of Finance,
American Finance Association, vol. 52(3), pages 1131-50, July.
[Downloadable!] (restricted)
Barry Eichengreen & Pipat Luengnaruemitchai, 2006.
"Why doesn’t Asia have bigger bond markets?,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Asian bond markets: issues and prospects, volume 30, pages 40-77
Bank for International Settlements.
[Downloadable!]
Did you know? Citation analysis on IDEAS includes online papers that are freely accessible and whose text could be automatically analyzed, currently about 210000 papers.