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Fixed-Income Markets in the United States, Europe, and Japan-Some Lessons for Emerging Markets

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  • Garry J. Schinasi
  • T. Todd Smith

Abstract

This paper identifies factors that contributed to the development and effectiveness of debt securities markets in the major advanced economies. Government securities markets have benefited from their international orientation—debt management is most effective when it is independent of monetary and exchange rate policies; and financial infrastructures should be patterned on the standards of liquidity, transparency, issuing and trading efficiency, and tax treatment. The same degree of consensus does not exist for corporate debt securities markets. The paper identifies six regulatory and market-created factors that help explain why the U.S. corporate debt market has flourished, while corporate debt securities markets elsewhere have only recently begun to develop.

Suggested Citation

  • Garry J. Schinasi & T. Todd Smith, 1998. "Fixed-Income Markets in the United States, Europe, and Japan-Some Lessons for Emerging Markets," IMF Working Papers 98/173, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:98/173
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    References listed on IDEAS

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    1. Maurice Obstfeld & Jay C. Shambaugh & Alan M. Taylor, 2005. "The Trilemma in History: Tradeoffs Among Exchange Rates, Monetary Policies, and Capital Mobility," The Review of Economics and Statistics, MIT Press, pages 423-438.
    2. Anja Shortland & David Stasavage, 2004. "What Determines Monetary Policy in the Franc Zone? Estimating a Reaction Function for the BCEAO," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 13(4), pages 518-535, December.
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    5. Frankel, Jeffrey & Schmukler, Sergio L. & Serven, Luis, 2004. "Global transmission of interest rates: monetary independence and currency regime," Journal of International Money and Finance, Elsevier, vol. 23(5), pages 701-733, September.
    6. Hazel Selvon & Tracy Polius & Oral Williams, 2001. "Reserve Pooling in the Eastern Caribbean Currency Union and the CFA Franc Zone; A Comparative Analysis," IMF Working Papers 01/104, International Monetary Fund.
    7. Cesarano, Filippo, 1998. "Hume's specie-flow mechanism and classical monetary theory: An alternative interpretation," Journal of International Economics, Elsevier, vol. 45(1), pages 173-186, June.
    8. Stanley Fischer, 2001. "Exchange Rate Regimes: Is the Bipolar View Correct?," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 3-24, Spring.
    9. Rose, Andrew K., 1996. "Explaining exchange rate volatility: an empirical analysis of 'the holy trinity' of monetary independence, fixed exchange rates, and capital mobility," Journal of International Money and Finance, Elsevier, vol. 15(6), pages 925-945, December.
    10. Atish R. Ghosh & Anne-Marie Gulde & Holger C. Wolf, 2000. "Currency boards: More than a quick fix?," Economic Policy, CEPR;CES;MSH, vol. 15(31), pages 269-335, October.
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    Cited by:

    1. Barry Eichengreen & Pipat Luengnaruemitchai, 2008. "Bond Markets as Conduits for Capital Flows: How Does Asia Compare?," NBER Chapters,in: International Financial Issues in the Pacific Rim: Global Imbalances, Financial Liberalization, and Exchange Rate Policy (NBER-EASE Volume 17), pages 267-313 National Bureau of Economic Research, Inc.
    2. Rhee, S. Ghon, 2001. "Further Reforms of the JGB Market for the Promotion of Regional Bond Markets," CEI Working Paper Series 2001-14, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    3. Batten, Jonathan A. & Fetherston, Thomas A. & Hoontrakul, Pongsak, 2006. "Factors affecting the yields of emerging market issuers: Evidence from the Asia-Pacific region," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 16(1), pages 57-70, February.
    4. Augusto de la Torre & Sergio Schmukler, 2007. "Emerging Capital Markets and Globalization: The Latin American Experience," IDB Publications (Books), Inter-American Development Bank, number 349, January.
    5. Claessens,Stijn & Klingebiel,Daniela M. H. & Schmukler,Sergio L., 2003. "Government bonds in domestic and foreign currency: the role of macroeconomic and institutional factors," Policy Research Working Paper Series 2986, The World Bank.
    6. World Bank & International Monetory Fund, 2001. "Developing Government Bond Markets : A Handbook," World Bank Publications, The World Bank, number 13865.
    7. Zsófia Árvai & Geoffrey M Heenan, 2008. "A Framework for Developing Secondary Markets for Government Securities," IMF Working Papers 08/174, International Monetary Fund.
    8. Barry Eichengreen & Pipat Luengnaruemitchai, 2006. "Why doesn’t Asia have bigger bond markets?," BIS Papers chapters,in: Bank for International Settlements (ed.), Asian bond markets: issues and prospects, volume 30, pages 40-77 Bank for International Settlements.
    9. Barry Eichengreen, 2013. "ADB Distinguished Lecture Renminbi Internationalization: Tempest in a Teapot?," Asian Development Review, MIT Press, vol. 30(1), pages 148-164, March.
    10. International Monetary Fund, 2003. "Managing Risks in Financial Market Development; The Role of Sequencing," IMF Working Papers 03/116, International Monetary Fund.
    11. World Bank, 2004. "Republic of Tunisia - Development Policy Review : Making Deeper Trade Integration Work for Growth and Jobs," World Bank Other Operational Studies 15693, The World Bank.
    12. Rhee, S. Ghon, 2000. "Further Reforms after the "BIG BANG": The Japanese Government Bond Market," CEI Working Paper Series 2000-3, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    13. Barry Eichengreen & Pipat Luengnaruemitchai, 2004. "Why Dones't Asia have the biger bond markets," Working Papers 242004, Hong Kong Institute for Monetary Research.
    14. repec:eee:ememar:v:32:y:2017:i:c:p:148-167 is not listed on IDEAS
    15. Jonathan A. Batten & Peter G. Szilagyi, 2006. "Developing Foreign Bond Markets: The Arirang Bond Experience in Korea," The Institute for International Integration Studies Discussion Paper Series iiisdp138, IIIS.

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