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The Development of Local Debt Markets in Asia : An Assessment

Author

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  • Mangal Goswami

    (Asian Development Bank Institute (ADBI))

  • Sunil Sharma

Abstract

The paper gives 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.

Suggested Citation

  • Mangal Goswami & Sunil Sharma, 2011. "The Development of Local Debt Markets in Asia : An Assessment," Finance Working Papers 23210, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:financ:23210
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    References listed on IDEAS

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    1. Ralph Chami & Connel Fullenkamp & Sunil Sharma, 2010. "A framework for financial market development," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(2), pages 107-135.
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    5. Jacob Gyntelberg, 2007. "Developing Asia Pacific Non-government Fixed Income Markets," SBP Research Bulletin, State Bank of Pakistan, Research Department, vol. 3, pages 7-26.
    6. Barry Eichengreen, 2006. "The development of Asian bond markets," BIS Papers chapters, in: Bank for International Settlements (ed.), Asian bond markets: issues and prospects, volume 30, pages 1-12, Bank for International Settlements.
    7. Ricardo J. Caballero, 2006. "On the Macroeconomics of Asset Shortages," NBER Working Papers 12753, National Bureau of Economic Research, Inc.
    8. Ralph Chami & Connel Fullenkamp & Sunil Sharma, 2010. "A framework for financial market development," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(2), pages 107-135.
    9. Lejot , Paul & Arner, Douglas & Schou-Zibell, Lotte, 2008. "Securitization in East Asia," Working Papers on Regional Economic Integration 12, Asian Development Bank.
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    Cited by:

    1. Sunder-Plassmann, Laura, 2020. "Infation, default and sovereign debt: The role of denomination and ownership," Journal of International Economics, Elsevier, vol. 127(C).
    2. Hans Genberg, 2015. "Capital market development and emergence of institutional investors in the Asia-Pacific region," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 22(2), pages 1-26, December.
    3. Agur, Itai & Chan, Melissa & Goswami, Mangal & Sharma, Sunil, 2019. "On international integration of emerging sovereign bond markets," Emerging Markets Review, Elsevier, vol. 38(C), pages 347-363.
    4. Inaba, Kei-Ichiro, 2021. "An empirical illustration of the integration of sovereign bond markets," Journal of Multinational Financial Management, Elsevier, vol. 61(C).
    5. Olfa Berrich & Halim Dabbou, 2023. "Tunisian corporate bond market liquidity: a qualitative approach," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 15(5), pages 795-819, February.
    6. Kuziva Mamvura & Mabutho Sibanda & Rajendra Rajaram, 2020. "Causal Dynamics among Foreign Portfolio Investment Volatility, Financial Deepening and Capital Markets in Low Income Countries," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 70(1-2), pages 20-38, January-J.
    7. Piyadasa Edirisuriya, 2017. "Financial Deepening, Economic Growth and Corruption: The Case of Islamic Banking," Review of Economics & Finance, Better Advances Press, Canada, vol. 8, pages 1-16, May.
    8. Gochoco-Bautista, Maria Socorro & Remolona, Eli M., 2012. "Going Regional: How to Deepen ASEAN's Financial Markets," ADB Economics Working Paper Series 300, Asian Development Bank.
    9. 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.
    10. Omar, Arti & Prasanna, P. Krishna, 2021. "Asymmetric effects of noise in Merton default risk model: Evidence from emerging Asia," Pacific-Basin Finance Journal, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Debt markets; Asia; financial markets;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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