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Asia's Debt Capital Markets: Appraisal and Agenda for Policy Reform

Author

Listed:
  • Paul Lejot

    (The University of Hong Kong)

  • Douglas Arner

    (The University of Hong Kong)

  • Liu Qiao

    (The University of Hong Kong)

  • Mylene Chan

    (The University of Hong Kong)

  • Mshall Mays

    (Asian Bond Market Forum
    Emerging ALpha INvestment Advisors Ltd)

Abstract

Markets for debt securities exist in a comprehensive way in no Asian economy other than Japan, even though short or medium-term bonds have been issued in almost all and Asian borrowers are established (though not prolific) international issuers. The markets provide no more than a simple borrowing medium for governments, banks and some companies, while investor activity is closely correlated with banking sector credit creation. Above all, the region¡¦s unfinished markets provide no guard against crisis or contagion, nor act as a balance to banking systems that are susceptible to distortion and event risk. Insufficient effort has been made to encourage activity by institutional investors. This paper is concerned with markets for tradable debt securities; and with the value and appropriateness of structured finance techniques to expand general usage of Asia¡¦s debt markets. The paper examines the condition of the domestic and offshore debt capital markets for Asia-Pacific risk. It traces common patterns of development among the established and nascent public debt securities markets in the region, and looks at the dynamics that will affect these markets in the medium term. Last, it seeks to identify whether Asian markets can be made to accommodate continuous issuing and trading activity typical of advanced economies, and to consider the associated advantages and considerations.

Suggested Citation

  • Paul Lejot & Douglas Arner & Liu Qiao & Mylene Chan & Mshall Mays, 2003. "Asia's Debt Capital Markets: Appraisal and Agenda for Policy Reform," Working Papers 192003, Hong Kong Institute for Monetary Research.
  • Handle: RePEc:hkm:wpaper:192003
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    References listed on IDEAS

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    1. Graham Bird & Ramkishen Rajan, 2000. "Is there a Case for an Asian Monetary Fund?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 1(2), pages 135-143, April.
    2. Pomerleano, Michael, 1998. "The East Asia crisis and corporate finances : the untold micro story," Policy Research Working Paper Series 1990, The World Bank.
    3. Valerie Cerra & Sweta Chaman Saxena, 2005. "Did Output Recover from the Asian Crisis?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 1-23, April.
    4. Flandreau, Marc & Sussman, Nathan, 2004. "Old Sins: Exchange Rate Clauses and European Foreign Lending in the 19th Century," CEPR Discussion Papers 4248, C.E.P.R. Discussion Papers.
    5. Gyutaeg Oh & Dae Keun Park & Jaeha Park & Doo Yong Yang, 2005. "How to Mobilize Asian Savings within the Region: Securitization and Credit Enhancement for the Development of East Asia’s Bond Market," Chapters,in: A New Financial Market Structure for East Asia, chapter 17 Edward Elgar Publishing.
    6. Leslie E Teo & Charles Enoch & Carl-Johan Lindgren & Tomás J. T. Baliño & Anne Marie Gulde & Marc G Quintyn, 2000. "Financial Sector Crisis and Restructuring; Lessons from Asia: Lessons from Asia," IMF Occasional Papers 188, International Monetary Fund.
    7. Barry Eichengreen & Ricardo Hausmann, 1999. "Exchange rates and financial fragility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 329-368.
    8. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 641-680.
    9. Beck, Thorsten & Asl Demirguc-Kunt & Maksimovic, Vojislav, 2002. "Financing patterns around the world : the role of institutions," Policy Research Working Paper Series 2905, The World Bank.
    10. Michael D. Bordo & Christopher Meissner & Angela Redish, 2003. "How "Original Sin" was Overcome: The Evolution of External Debt Denominated in Domestic Currencies in the United States and the British Dominions," NBER Working Papers 9841, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Paul Lejot & Douglas Arner & Liu Qiao, 2004. "Making Markets: Reforms to Strengthen Asia's Debt Capital Markets," Working Papers 132004, Hong Kong Institute for Monetary Research.
    2. Schou-Zibell, Lotte & Wells, Stephen, 2008. "India's Bond Market-Developments and Challenges Ahead," Working Papers on Regional Economic Integration 22, Asian Development Bank.
    3. Tony Latter, 2008. "What Future for the Hong Kong Dollar Corporate Bond Market?," Working Papers 192008, Hong Kong Institute for Monetary Research.

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