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The Development of Local Debt Markets in Asia


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  • Mangal Goswami
  • Sunil Sharma


The paper makes an assessment of the progress made in developing local debt markets in emerging Asia. Market development has been limited by hurdles confronting borrowers and lenders, current and potential liquidity providers, and insufficient support from government policies and regulations. Besides fostering a credit culture to deepen local debt markets, the issue of critical size can be addressed through an integrated regional market for local currency bonds that provides greater scale, efficiency, and access. With rapid economic growth in Asia, a key challenge is to generate financial assets that can provide the underlying collateral for expanding fixed-income markets, and hence domestic and regional investment opportunities.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 11/132.

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Length: 31
Date of creation: 01 Jun 2011
Date of revision:
Handle: RePEc:imf:imfwpa:11/132

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Keywords: Capital markets; Liquidity; Access to capital markets; Asia; Bond issues; Borrowing; Corporate sector; Debt management; Emerging markets; External financing; bond; bonds; bond markets; corporate bonds; bond market; capital market; government bonds; securitization; hedging; capital inflows; corporate bond; domestic bond markets; financial institutions; local bond; bond issuance; domestic bond; local bond markets; corporate bond markets; derivatives markets; government securities; government bond markets; corporate bond market; derivative markets; local currency bond markets; local currency bond; financial system; financial markets; bond funds; government bond; derivative; hedge funds; bond market development; capital market development; capital controls; international finance; developing bond markets; domestic bond market; capital flows; capital gains; hedge; global capital markets; financial assets; international finance corporation; bond fund; financial systems; asian bond markets; emerging bond markets; global bond; financial stability; gross domestic product; investor confidence; local bonds; global bond market; local bond market; debt securities; interest rate futures; capital outflows; net capital; capital adequacy; rate bonds; market bond; subsidiaries; denominated bond; market assets; domestic bonds; hedging instruments; bond futures; government bond futures; cash bond markets; capital gains tax; development of corporate bond markets; securities industry; bond prices; interest rate risk; domestic capital markets; financial market; stock exchanges; futures market; asian bond market; securities dealers; domestic government bonds; bond transactions; international capital; bond index; domestic capital; dollar bond market; securities law; financial intermediation; corporate valuations; capital market issuance; forward market; asset markets; credit rating; capital market borrowing; treasury bond; mature markets; risk aversion; financial instruments; money market; bond issuers; international capital market; derivatives market; credit rating agencies; financial liberalization; emerging market bond; securities market; derivatives instruments; derivative products; money markets; securities companies; financial intermediaries; derivatives transactions; index fund; bond market capitalization; domestic securities; local capital markets; private bond; dollar bond; international banks; cash bond market; interest rate derivative; securities valuation; liberalization of capital; public bonds; international financial statistics; interest rate swaps; bond instruments; hedges; swap transactions; term bonds; international standards; stock indices; securities trading; securities markets; securities borrowing; asset valuation; bond financing; financial contracts; local corporate bond markets; bond index fund; financial market development; bond price; liquid markets; government bond index; hedge fund; islamic bond; derivative transactions; forward markets; securities contracts; reserve requirements; foreign equity;

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  1. Ralph Chami & Sunil Sharma & Connel Fullenkamp, 2009. "A Framework for Financial Market Development," IMF Working Papers 09/156, International Monetary Fund.
  2. Lejot , Paul & Arner, Douglas & Schou-Zibell, Lotte, 2008. "Securitization in East Asia," Working Papers on Regional Economic Integration 12, Asian Development Bank.
  3. Jacob Gyntelberg & Guonan Ma & Eli Remolona, 2006. "Developing corporate bond markets in Asia," BIS Papers chapters, in: Bank for International Settlements (ed.), Developing corporate bond markets in Asia, volume 26, pages 13-21 Bank for International Settlements.
  4. John D. Burger & Francis E. Warnock, 2006. "Local Currency Bond Markets," NBER Working Papers 12552, National Bureau of Economic Research, Inc.
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Cited by:
  1. Aaron Mehrotra & Ken Miyajima & Agustin Villar, 2012. "Developments of domestic government bond markets in EMEs and their implications," BIS Papers chapters, in: Bank for International Settlements (ed.), Fiscal policy, public debt and monetary policy in emerging market economies, volume 67, pages 31-50 Bank for International Settlements.
  2. Ilhyock Shim, 2012. "Development of Asia-Pacific corporate bond and securitisation markets," BIS Papers chapters, in: Bank for International Settlements (ed.), Weathering financial crises: bond markets in Asia and the Pacific, volume 63, pages 5-14 Bank for International Settlements.
  3. Yong Sarah Zhou, 2013. "Explaining ASEAN-3’s Investment Puzzle A Tale of Two Sectors," IMF Working Papers 13/13, International Monetary Fund.
  4. Ken Miyajima & Madhusudan Mohanty & Tracy Chan, 2012. "Emerging market local currency bonds: diversification and stability," BIS Working Papers 391, Bank for International Settlements.
  5. Philip Turner, 2012. "Weathering financial crisis: domestic bond markets in EMEs," BIS Papers chapters, in: Bank for International Settlements (ed.), Weathering financial crises: bond markets in Asia and the Pacific, volume 63, pages 15-34 Bank for International Settlements.


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