A Framework for Developing Secondary Markets for Government Securities
AbstractThis paper consolidates previous work on the development of secondary markets for government securities, and focuses on the sequencing of measures necessary for their development. Six main lessons are identified: (i) a commitment to achieving and maintaining a stable macroeconomic environment, especially prudent fiscal policy, should underpin market development; (ii) a sound and transparent public debt management strategy supports secondary market activity; (iii) a deep and diverse investor base is required; (iv) poor market infrastructure leads to high transaction costs, slow order execution, and excessive operational risk, which all inhibit trading; (v) secondary market growth is facilitated by effective monetary policy implementation; and (vi) reforms should be sequenced to ensure even development of all the structures supporting the secondary market.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 08/174.
Date of creation: 01 Jul 2008
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-06 (All new papers)
- NEP-CFN-2008-08-06 (Corporate Finance)
- NEP-MAC-2008-08-06 (Macroeconomics)
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