IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Developments in sovereign bond issuance in the Central and Eastern European region after the Lehman collapse

  • Norbert Kiss M.

    ()

    (Magyar Nemzeti Bank (central bank of Hungary))

  • István Mák

    ()

    (Magyar Nemzeti Bank (central bank of Hungary))

This paper focuses on the impact of the financial and economic crisis of 2008–2009 on the issuance of sovereign debt in the Central and Eastern European region and other developing countries. As a result of the fiscal rescue packages, the financing requirement of both developed and emerging countries has increased significantly since 2007, giving rise to substantial changes in risk appetite as well as considerable shifts in demand for the securities of various issuers operating in the global bond markets. During the most severe period of the crisis, only countries with the best credit ratings were able to obtain substantial amounts of funds, while less developed or emerging economies had limited options. In particular, shrinking borrowing opportunities translated into rising yields, weak auction demand and hence unsuccessful auctions. While the market turmoil did not spare less developed euro area countries either; these developments had a particularly negative impact on the government securities markets in the Central and Eastern European region. Although improving risk appetite prompted a parallel rebound in emerging sovereign bond markets, heightened competition for the shrinking financing resources raised the cost of funds in higher-risk economies considerably. Our findings show that – besides developments in risk appetite – demand for the sovereign bonds of emerging countries was also influenced by the crowding-out effect generated by the increased issuance of government papers in developed markets.

If you experience problems downloading a file, check if you have the proper application to view it first. 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.

File URL: http://english.mnb.hu/Root/Dokumentumtar/ENMNB/Kiadvanyok/mnben_mnbszemle/mnben_szemle_cikkei/kissm-mak_en_0912.pdf
Download Restriction: no

Article provided by Magyar Nemzeti Bank (the central bank of Hungary) in its journal MNB Bulletin.

Volume (Year): 4 (2009)
Issue (Month): 4 (December)
Pages: 13-23

as
in new window

Handle: RePEc:mnb:bullet:v:4:y:2009:i:4:p:13-23
Contact details of provider: Web page: http://www.mnb.hu/

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:mnb:bullet:v:4:y:2009:i:4:p:13-23. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maja Bajcsy)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.